ESC recommendations regarding Carbon Border Adjustment Mechanism

To combat carbon leakage, which until now has been regulated in the EU Emissions Trading System itself, a new instrument is being developed: Carbon Border Adjustment Mechanism (CBAM). Given the importance of combating carbon leakage for the climate, economy, and employment, ESC believes that it is a good development.

However, ESC strongly recommends the European Commission to monitor closely and undertake additional investigation of the potential undesirable scenarios that this instrument might cause. These scenarios concern carbon leakage and the competitive position of European companies on the global market. ESC also advises to check the new instrument on the WTO compliance and stay engaged in a dialogue with other partners regarding the implementation of the CBAM.

For more information about the ESC recommendations, please see here.