PODCAST: COP28 flags need for tough regulatory tools such as CBAM
BARCELONA (ICIS)–With COP28 pushing climate change up the news agenda, we untangle the mysteries of the EU’s Carbon Border Adjustment Mechanism (CBAM) and explain what it means for chemicals and fertilisers.
- CBAM puts price on carbon for imports to Europe
- Potential cost of €3.2bn for fertiliser importers, based on 2022 imports
- Covers iron, steel, aluminium, fertilizers, electricity and hydrogen
- Price will be same as existing European Trading System (ETS)
- Importers will pay for the cost of carbon
- Transitional reporting ends 2025, charging phased in 2026-2034 (2.5%-100%)
- Designed to ensure level playing field for imports and local production
- Chemicals currently get around 75% free allowances for CO2
- This could fall to zero if chemicals added to CBAM likely after 2030
- EU allowance currently €75-80/tonne
- European Commission aims for all imports to be covered by CBAM
In this Think Tank podcast, Will Beacham interviews Lewis Unstead, EU carbon and power market analyst for ICIS and Nigel Davis, ICIS Insight Editor.
Editor’s note: This podcast is an opinion piece. The views expressed are those of the presenter and interviewees, and do not necessarily represent those of ICIS.
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