The EU’s new trade weapon
Decarbonising is easy when a regulator can set rules and regulations for the territory it oversees. But how do you convince other countries or regions to go green? A new hybrid trade and climate superweapon recently created by the EU aims to solve that conundrum. Get ready for the CBAM
From FORESIGHT Climate & Energy, Watt Matters is a podcast all about the energy transition and the shift to a decarbonised economy.
For the best possible audio experience, listen to Watt Matters in the FORESIGHT app. This requires a subscription to FORESIGHT Climate & Energy. If you would like to know if your company/organisation is subscribed to FORESIGHT Climate & Energy, or if you would like a reminder of your login details, send an email to info@foresightdk.com.
Greenhouse gas emissions are a global problem as carbon dioxide and the heating side-effects caused by it do not respect national frontiers. This means that a country or region that may have the best decarbonisation intentions will only partly achieve its objectives if the rest of the planet is not playing by the same rule book.
An innovative and, in some circles, controversial new climate superweapon designed by the European Union is coming into frame. The carbon border adjustment mechanism, known as CBAM, is a variant of a carbon border tax that will soon be deployed at the EU’s trade borders.
A select list of imports that do not respect certain green criteria will be slapped with extra charges, in a bid to get trade partners to follow the EU’s lead and get serious about the energy transition. The mere idea of CBAM has already prompted some governments to start designing their own systems in order to avoid the anti-climate-dumping regime, while others are crying foul and threatening to lodge complaints at the highest level.
Watt Matters is joined by one of the architects of CBAM, MEP Mohammed Chahim, in order to delve into the detail of the new tool in the EU’s green arsenal. The discussion with one of the European Parliament’s most intelligent and thoughtful energy lawmakers looks at what the complex negotiations settled on, what was rejected and what the future holds for the new rules.
Also don’t miss why today’s guest was chased into a public toilet by overly enthusiastic lobbyists.
Enjoy the show.
If you have any thoughts or questions about anything that has been discussed in this week’s episode, you can reach us at our Twitter accounts:
Mohammed Chahim
Oliver Sartor
Sam Morgan
Michaela Holl
Jan Rosenow
David Weston
@WattMattersPod
FORESIGHT Climate & Energy
Listen and subscribe to Watt Matters wherever you get podcasts. Follow us on Twitter at @WattMattersPod or email us at show@wattmatterspodcast.com
Illustration: Masha Krasnova-Shabaeva.
Show notes:
Germany’s e-fuel EU loophole could mean ‘135bn more litres of petrol burnt’
Europe’s Net-Zero Industry Act: What does it mean for carbon capture and storage? – Clean Air Task Force
EU space programme, Green Deal endangered by Brexit vacuum – EURACTIV.com
Try full access to FORESIGHT Climate & Energy for €1 a day
Join over 100,000 policymakers, energy experts in business, finance, and academia, city leaders, and leading NGOs in having access to FORESIGHT Climate & Energy.
GET YOUR 30 DAY TRIAL
Related articles
Europe braces itself for a battery arms race
Demand for electric vehicle batteries in Europe is accelerating thanks to a mix of new regulations and promising business cases, which has sparked a homegrown industry that aims to take on the world. But the policies will need to be strong enough to fend off the vagaries of geopolitics
Not a silver bullet
Carbon prices at sufficiently high levels can push firms to internalise the costs of greenhouse gas emissions while providing a long-term price signal to drive investments needed for decarbonisation. Emission trading systems and carbon taxes feature in a growing number of climate strategies, but even the most well-designed instruments must be accompanied by other policy measures if emissions reductions goals are to be reached
Chemicals’ complex route to green
Electrification of the energy-intensive chemicals sector is not always possible so finding alternative low-carbon processes is climbing the industry's agenda
A new way to count greenhouse gas emissions
Regulators normally only keep tabs on the climate-bashing emissions produced within a country’s territory—discounting or even completely ignoring the carbon emitted during the manufacturing and shipping of imported goods. Sweden is bucking that trend with an ambitious new policy
Western Balkans try to break King Coal’s grip on power
Discussions to usher in the end of coal are advancing in much of the European Union, but the Western Balkans region is lagging behind as the fuel continues to dominate the local power market
Cross-border cables hold a crucial role in the energy transition
An interconnected transmission grid in Europe would result in lower prices and greater levels of clean energy. But several nations are falling behind on export capacity leading to some member states looking beyond the Union’s borders
Using trade measures for climate gain
Europe is considering taking the bold step of introducing a border carbon adjustment tariff on goods imported from regions where carbon pricing is lacking, placing trade right in the middle of its climate ambitions
Potential for Europe to pivot to China on carbon trade as UK and US pull back
The structure of the European Union’s 15-year-old carbon trading market is long overdue for an update if it is to keep pace with growing national ambitions to halt climate-destroying activity and geopolitical shifts
The EU cannot ‘go it alone’ on Border Carbon Adjustments
Border carbon adjustments (BCAs) are technically difficult to design and politically challenging to implement. If BCAs are going to succeed, the European Union (EU) will need to engage trade partners from the start, says E3G’s Johanna Lehne
United States baulks at the political cost of a carbon price
As major markets around the world add various forms of carbon tax, in the United States a country-wide price on carbon is a political non-starter
Leave a Reply