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Decarbonisation dominoes: carbon border adjustments could increase clarity

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02 November 2021

Decarbonisation dominoes: carbon border adjustments could increase clarity

Report summary

The European Union released the world’s first proposal for a carbon border adjustment in July. While the proposal governs EU trade, the biggest impacts may be the reactions of players outside the EU’s borders. How will other countries respond to the EU’s proposal? Are companies prepared for those governmental policy responses? And are there ways companies or governments can circumvent border adjustments? In this insight, we examine how countries may adjust their carbon charge policy in response to a border adjustment, how companies are planning for carbon charges, and how these reactions may provide clarity for investors.

Table of contents

  • Executive summary
  • Europe addresses carbon emissions from imports
  • Which countries will be most impacted?
  • The world addresses tax leakage
  • Optimising electricity sources may ease the economic burden
  • The European Commission is looking to expand the CBAM
  • The affected industries are prepared for this, right?
  • How are oil and gas companies planning?
  • CBAMs’ domino effect may establish clarity
  • But there are downsides too
  • Is the future of carbon economics coming into focus?

Tables and charts

This report includes 7 images and tables including:

  • Hypothetical 2021 CBAM charge for covered products originating from Russia and Canada
  • EEA trading partners most affected by the proposed CBAM
  • Example of carbon tax flow and trade with CBAM
  • Scope 1: share of EU ETS industrial CO2e emissions by sector
  • Largest EEA trading partners
  • Metals and mining companies’ disclosed internal shadow carbon tax values
  • Oil and gas companies’ highest disclosed internal shadow carbon tax profiles

What's included

This report contains:

  • Document

    Decarbonisation dominoes: carbon border adjustments could increase clarity

    PDF 1020.27 KB