Insight
CBAM: How the world will share the EU’s climate ambitions
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
After years of debate, the European Union’s Carbon Border Adjustment Mechanism (CBAM) implementation is proceeding at full speed. The first of its kind, this measure will impose a carbon price on the import of certain goods into the EU, equalising carbon costs of EU and non-EU products. Despite open questions remain to be addressed, Wood Mackenzie expects the CBAM to continue on an accelerated schedule and wider scope, impacting businesses within and beyond the EU.
Table of contents
- Executive summary
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CBAM: how the world will share the EU’s climate ambitions
- The EU is pushing for early implementation and wider scope of the CBAM
- How will the CBAM impact the EU market?
- Importers will face higher carbon and administrative costs
- Producers will no longer be shielded by free allowances
- Manufacturers may pass higher costs to consumers
- EU trade partners will feel greater pressure in relevant upstream materials sectors
- EU trade partners will eventually want to introduce a domestic carbon tax, with cascading effects globally
- The CBAM will likely change competitive dynamics between the EU and foreign producers
- 2 more item(s)...
Tables and charts
This report includes the following images and tables:
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CBAM legislative processAn extended scope and an earlier implementation of the CBAM
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EU ETS allowance auction (2021-2032)Phase-out of free allowancesEffective CBAM rateEU’s import value in CBAM sectors and carbon price in trade partnersEU steel import composition by value (2021)Average steel plant emission intensityEU aluminium import value composition by value (2021)Average aluminium smelter emission intensityChange in comparative advantage associated with carbon cost (steel and aluminium)
What's included
This report contains:
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