IOGP response to the public consultation on the Carbon Border Adjustment Mechanism (CBAM) proposal

This document provides IOGP’s response to the EU public consultation on the Carbon Border Adjustment Mechanism (CBAM) proposal.

The increased EU climate ambition and associated price signals from a revised EU ETS will increase the need for an effective carbon leakage protection mechanism for the impacted EU ETS sectors to incentivize emission reductions from a global perspective while avoiding deindustrialization, loss of investment and employment in the EU; as well as ensure a level playing field for EU producers when competing domestically and on export markets.

• An adequate carbon leakage protection mechanism needs to cover both imports and exports for the relevant EU ETS sectors as the granting of free allowances does today. An import-only CBAM is no adequate alternative to free allowances
• Earmarking of the additional revenues generated by the CBAM to bridge the investment gap to decarbonize the industries covered by the EU ETS
• Phased introduction and need for re-assessments