Following Europe’s increasing ambition on climate mitigation, the European Commission proposed a Carbon Border Adjustment Mechanism (CBAM) aimed at preventing the risk of carbon leakage for some sectors, starting with aluminium, cement, iron and steel, fertilisers, electricity.
The mechanism is designed to ensure that the price of imports reflect more accurately their carbon content, and in line with the World Trade Organization rules and other international obligations.
Why it’s important
With the EU’s higher climate ambition for 2030 and the degressive nature of the existing carbon leakage provisions, our industry will need increased protection measures to stay globally competitive.
The CBAM is at present an ill-fitted tool for our sector, as it does not address the high indirect carbon costs faced by non-ferrous metals producers through their national electricity prices.It is essential that current indirect carbon costs compensation is maintained in the years to come.
What we are seeking
We’re asking policymakers to reflect the unsuitability of the Commission’s proposed CBAM for the non-ferrous metals sector. Our main concerns are that it:
- Does not cover the indirect carbon costs faced by European producers
- Does not provide protection to European exports in third markets
- Would lead to higher costs for downstream producers, incentivizing moving upstream production out of Europe.
We’ve committed to work with policymakers to address these issues in the years ahead.