C 152/184
EN
Official Journal of the European Union
6.4.2022
3.3.
Many important topics will need further development through delegating acts for implementation.
Therefore, considering this point together with the previous one, it is almost impossible to figure out what the consequences of implementation will be for each manufacturing sector.
Doubts about several key details of the proposed Regulation make it difficult to assess it until the legislative process has progressed further.
However, uncertain framework conditions must be avoided, especially when assessing CO2 for imports, so as not to undermine the proactive and anticipatory measures taken by European companies to protect the climate.
3.4.
For electricity imports, it is unclear if the Commission has properly assessed the impact on the electricity price in the EU electricity market and how it would generate higher costs for consumers and, therefore, would increase the risk of carbon leakage among electricity-intensive sectors.
It should not be forgotten that the consumption of electricity is not considered in the scope for calculation of the carbon footprints of imported products (5).
3.5.
European industry is export-oriented and if, as a consequence of the CBAM, it has some protection against imports but cannot compete in international markets, the lack of competitiveness will be considerable and Europe will no longer be able to attract industrial investments.
3.6.
A very quick replacement of existing CO2 leakage measures by the CBAM could lead to significant uncertainty, disrupting long-term investment decisions already taken based on the recently revised 2030 targets.
It could also reduce the industry’s capacity to invest in low-carbon technologies and become a barrier to competition for access to third markets.
Therefore, where necessary, the current rate of free allowance should be retained initially to enable CBAM covered industries to become more carbon efficient followed by a gradual reduction in free allowances, as deemed appropriate, to facilitate further decarbonisation.
3.7.
Competitiveness and price effects on the value chain should be carefully assessed to limit the impact, especially in exporting sectors such as agri-food, among others, that are very dependent on products from the sector already covered in the CBAM proposal.
3.8.
The CBAM could only effectively achieve its full goals if the requirement of avoiding CO2 for imports into the EU is offset by advantages from climate-friendly production for exports by European producers.
It might be the case that there will be a reasonably level playing field between third-country companies and EU companies in the Single Market, but no EU company could compete abroad, as EU producers will pay full carbon costs, while competitors from third countries pay little or none.
3.9.
The system may open the door to several circumvention schemes such as source shifting, verification details, multi-facility companies in third countries falsely claiming that products made in high carbon footprint facilities are made in low carbon footprint facilities, source shuffling and definition of goods.
This could hamper progress in meeting the CBAM’s more ambitious climate goals.
The proposal should be carefully refined throughout the legislative process to avoid those pernicious behaviours which seriously harm the legislation’s objective: goods should bear their own climate footprint regardless of where they come from to promote efficiency in worldwide climate change mitigation instead of a local reduction by outsourcing the emissions.
4.
Specific comments 4.1.
The EESC has been very active in exploring the possibilities, limitations and important aspects to be developed under a Border Adjustment Scheme or tax related alternative, in order to reduce carbon leakage by equalising climate cost and efforts, either from EU or non-EU products.
The EESC was the first EU institution to identify these possibilities as a complementary measure for limiting carbon leakage.
(5)
European Commission CBAM impact assessment, Annex 8.