Closing the Green Deal for Industry

The report critiques CBAM designs based on incurred emissions due to legal, administrative, and economic risks, such as resource shuffling and export leakage. It proposes a three-pillar alternative: a 'climate contribution' charge on basic materials, dynamic free EU ETS allowance allocation conditional on transition plans, and Carbon Contracts for Difference (CCfDs) to fund the incremental costs of clean production. This framework aims to provide effective carbon price signals across the value chain and support an inclusive transition across all EU industrial regions.

• CBAM designs based on incurred emissions face three primary challenges: legal/economic constraints regarding export refunds, the risk of 'resource shuffling' where third countries attribute low-carbon production to EU exports, and high administrative complexity in monitoring embodied emissions across complex value chains.
• A proposed 'climate contribution' would charge producers of basic materials per weight of material based on a carbon intensity benchmark multiplied by the EU ETS carbon price. This mechanism would use established excise adjustment rules, meaning liability is not due for exports and is applied to importers of carbon-intensive materials.
• To prevent double charging and maintain incentives for carbon efficiency, the report suggests granting free EU ETS allowances at a benchmark rate, provided that producers submit and pursue transition plans outlining their shift to climate neutrality.
• Carbon Contracts for Difference (CCfDs) are recommended to bridge the financial gap for clean production and recycling by paying for carbon savings based on the incremental costs of clean processes relative to conventional ones, thereby avoiding WTO concerns.
• The proposed policy combination is estimated to have a moderate financial impact on consumers, with household expenditure increasing by approximately 0.2 percent at a carbon price of 30 euros.
• The report emphasizes that the transition requires coordination through public and private transition plans, where governments identify infrastructure needs and firms provide milestones for transitioning specific installations to climate neutrality.

APA

NEUHOFF, K., CHIAPPINELLI, O., RICHSTEIN, J., DE CONINCK, H., LINARES, P., GERRES, T., KHANDEKAR, G., WYNS, T., ZETTERBERG, L., REKK, B. F., & ŚNIEGOCKI, A. (n.d.). Closing the Green Deal for Industry. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2021/06/Closing-the-Green-Deal-for-Industry_FINAL.pdf

Chicago

NEUHOFF, KARSTEN, OLGA CHIAPPINELLI, JÖRN RICHSTEIN, HELEEN DE CONINCK, PEDRO LINARES, TIMO GERRES, GAURI KHANDEKAR, et al. Closing the Green Deal for Industry. Climate Strategies, n.d. https://climatestrategies.org/wp-content/uploads/2021/06/Closing-the-Green-Deal-for-Industry_FINAL.pdf.

Wikipedia

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BibTeX

@techreport{neuhoffndclosing, author = {NEUHOFF, KARSTEN and CHIAPPINELLI, OLGA and RICHSTEIN, JÖRN and DE CONINCK, HELEEN and LINARES, PEDRO and GERRES, TIMO and KHANDEKAR, GAURI and WYNS, TOMAS and ZETTERBERG, LARS and REKK, BALÁZS FELSMANN and ŚNIEGOCKI, ALEKSANDER}, title = {{Closing the Green Deal for Industry}}, institution = {Climate Strategies}, url = {https://climatestrategies.org/wp-content/uploads/2021/06/Closing-the-Green-Deal-for-Industry_FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }