The Carbon Border Adjustment Mechanism (CBAM) will come into effect in 2026. The costs it will generate for importers could be limited, according to a report by think tank Sandbag, published on Monday 3 June. Back in 2021, the think tank published a report with similar conclusions (see EUROPE 12780/8).
Among the various scenarios explored in this new document is the hypothesis that European producers will experience an increase in production costs with the abolition of free quotas, which they will pass on to consumers.
On the other hand, importers should be less affected for a number of reasons: in its current form, CBAM does not cover all the sectors that are subject to the ETS in the EU, nor does it affect finished products.
In addition, Sandbag predicts that third-country exporters could concentrate their low-carbon products in the EU and redirect the rest to less carbon-intensive markets. As a result, importers of these products will be only marginally affected by CBAM, but they will have to match European prices, thereby creating added value.
In the case of Chinese goods, analysts have calculated that importers could make a net profit of €32 million.
On the other hand, in a scenario where import flows remain similar to those of the current period after 2026, importers of Chinese products could record a loss of €245 million. This would be due to CBAM’s costs, which far exceed its revenues.
To see the report go to https://aeur.eu/f/cir (Original version in French by Léa Marchal)