CBAM: EU Commission launches a call for evidence for an impact assessment

EU Commission launches a call for evidence for an impact assessment on CBAM. The term to provide for the contribution will expire on 26 August 2025.

The problems the initiative aims to tackle are:

downstream carbon leakage which generates the risk of carbon leakage shifting to later stages of the supply chain. Downstream carbon leakage could occur if higher carbon costs for basic materials in the EU prompt manufacturers of downstream goods to move production abroad where carbon costs for those basic materials are lower. Alternatively, imports of carbon-intensive downstream goods from countries with less stringent climate policies could replace equivalent domestic products with lower embedded emissions. Downstream goods are products made using the goods covered by CBAM (‘basic goods’). The risk of downstream carbon leakage was identified, among other sources, in the European Steel and Metals Action Plan and numerous interactions with stakeholders.
Circumvention which can arise from any practices for which there is insufficient due cause or economic justification, other than to effectively avoid, wholly or partially, the financial liabilities arising from CBAM, undermining the environmental integrity of the mechanism.
Electricity calculation by means of default value.

The extention of CBAM to downstream goods is expected to have the below impacts:

Environmental: prevention of downstream carbon leakage, incentive for non-EU operators to reduce emissions and for non-EU countries to increase their carbon pricing ambitions.
Economic/social: limited cost increases are expected for downstream goods to be added to the scope. The extent of the cost increase will depend on the emission intensity of the input material and existing carbon pricing. Such cost increases will impact producers and consumers. The measure will also generate revenue.
Administrative: compliance costs for importers and installations, administrative costs for authorities.

Including additional anti-circumvention measures is expected to have the below impacts.

Environmental: ensuring CBAM’s effectiveness as a decarbonisation policy by preventing carbon leakage.
Economic/social: effective mitigation of the circumvention risk will strengthen social acceptance of CBAM.
Administrative: compliance costs for importers and installations, administrative costs for authorities.

The amendment of the rules for electricity is expected to have the below impacts.

Environmental: ensuring CBAM’s effectiveness in promoting decarbonisation efforts for the production of electricity in non-EU countries.
Economic/social: enhancing the import of greener electricity at lower cost for EU industry.
Administrative: reduction of compliance costs for importers and for authorities