CBAM: An economic and legal analysis of the EU's new carbon border adjustment mechanism

CBAM: An economic and legal analysis of the EU's new carbon border adjustment mechanism

In this one-hour webinar, Frontier and Freshfields will look at the economic and legal implications of the EU's new carbon border adjustment mechanism (CBAM).

In their jumbo trialogues in December, the Council, the Parliament and the Commission agreed on the revision of the EU ETS Directive and the introduction of a CBAM Regulation. This new package will fundamentally modify the existing framework of protection against carbon leakage risks: The allocation of free EU-ETS allowances, from which domestic producers have benefited so far, is to be gradually phased out between 2026 and 2034. Instead, a carbon border adjustment mechanism will be introduced to maintain a level playing field in international competition by charging imports of corresponding products with a price linked to the EU ETS price. According to the draft CBAM Regulation, the scope of this new scheme will initially include products made of iron and steel, cement, aluminium and fertilisers, as well as electricity and hydrogen. The inclusion of other products, such as chemicals and more complex downstream products, is to be expected.

The webinar will address some of the key questions that arise for energy-intensive businesses and financial sponsors: How does CBAM work? How does it affect trade flows and cost structures of domestic and foreign manufacturers, as well as exporters and importers? What compliance measures do businesses need to implement? What options are there to optimise cost structures? What are the barriers to abuse? And how can CBAM be improved in order to maintain a level playing field for domestic companies with export business models and manufacturers of complex products in accordance with WTO law constraints?   

This webinar will be presented in English.