Belgium: The European cement association Cembureau has called for the European Union (EU) to continue to permit the free allocation of carbon credits under the EU Emissions Trading System (ETS) until it completes the roll-out of Carbon Border Adjustment Mechanisms (CBAM) in 2030 at the earliest. It said that this would provide indirect cost compensation and mitigate the risk of the relocation of industries. It would additionally incentivise emissions reduction by EU suppliers, ensure a smooth implementation of CBAM in the event of challenge to CBAM by the World Trade Organisation (WTO) and mitigate distortions on the EU internal market, according to the association. It gave the example of cement producers competing with other building materials producers as a way in which an overlap period can limit the disruptive impact of CBAM on European value chains.
Chief executive officer Koen Coppenholle said, “A pragmatic approach is needed regarding the interaction of CBAM with the existing carbon leakage measures. A full co-existence of CBAM and free allocation is essential to minimise risks for the industry, avoid distortions on the internal market, safeguard the competitiveness of exports and provide certainty for investors. Such full co-existence, which can be done without any risk of ‘double protection,’ should last at least until the end of Phase IV of the EU ETS in 2030, following which the CBAM will hopefully be mature and expanded to cover most sectors of the economy.” He added, “CBAM is a useful tool to address the imports of products not subject to similar carbon constraints in the EU and therewith mitigates the carbon leakage risk allowing the European cement industry to deliver low-carbon investments. The Environment Committee’s report highlights some key points in this respect, notably that a CBAM should result in EU and non-EU suppliers competing on the same CO2 costs basis, that the scope of CBAM should be wide to avoid market distortions and that both direct and indirect emissions should be included.”
