Energy Evolution A dose of realism for Europe’s CBAM
Apr 15, 2025
Coralie Laurencin, Senior Director at S&P Global, Dan Maleski from Redshaw Advisors, and Nick Ogilvie of Carbon Chain discuss the EU's Carbon Border Adjustment Mechanism (CBAM) and its complexity. They unravel the balance between climate goals and economic realities facing industries. Insights include the compliance burdens on importers, reactions from the solar sector, and challenges posed by global market pressures. The trio also highlights the importance of accurate emissions data and the impact of protectionist sentiments on international trade.
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Future of EU Carbon Pricing
- EU carbon prices stabilized between €60-80 per ton since the Ukraine war but are forecasted to reach €100 by 2030.
- Debate grows whether the emissions trading system can push industry to decarbonize amid competitiveness pressures.
CBAM Drives Global Carbon Pricing
- CBAM has encouraged global carbon pricing adoption with countries like Turkey, UK, and India considering or enhancing ETS policies.
- While net zero remains a distant priority worldwide, CBAM stimulates carbon market development as intended.
CBAM Cost Uncertainties Persist
- New CBAM threshold exempts many small importers but uncertainties remain over cost calculation and emissions intensity benchmarks.
- Importers face challenges in verifying emissions data and cost exposure while adapting reporting and compliance strategies.