CBAM must not be used to export pollution

Carbon Market Watch criticizes proposals to compensate EU exporters under the Carbon Border Adjustment Mechanism (CBAM), arguing that the actual competitiveness risk is limited and that subsidies would reward polluters. The author contends that CBAM revenue should not be used to subsidize EU producers, as this could conflict with WTO rules and encourage the export of polluting products. Instead, the document advocates for targeted financial support for clean technology innovation and the global expansion of carbon pricing.

• The European Commission's plan for the Clean Industrial Deal proposes a legislative measure by the end of 2025 to compensate affected producers proportionally to the phase-out of free allowances, funded by CBAM revenue which is forecast at approximately €1.5 billion per year.
• The actual economic impact of CBAM on EU exports is relatively small; in 2020, CBAM sectors represented only 2.6% of EU exports to the rest of the world and 0.8% of the EU's gross value added (GVA).
• Export shares of production for CBAM-covered goods in 2023 were low: 18% for iron and steel, 15% for fertilisers, 7% for cement, and 3% for aluminium.
• Providing export rebates or increasing free allowances would undermine the EU Emissions Trading System (ETS) and the Paris Agreement, as sectors receiving free allowances have historically failed to reduce emissions in line with the agreement.
• The author proposes replacing blanket export rebates with targeted financial support for innovation in clean technologies and the use of funds unlocked by phasing out the free allocation system, which cost €40 billion in 2023.

APA

Marullaz, L. T. J. (2025). CBAM must not be used to export pollution. Carbon Market Watch. https://carbonmarketwatch.org/2025/07/16/cbam-must-not-be-used-to-export-pollution/

Chicago

Marullaz, Lidia Tamellini Jeanne. CBAM must not be used to export pollution. Carbon Market Watch, 2025. https://carbonmarketwatch.org/2025/07/16/cbam-must-not-be-used-to-export-pollution/.

Wikipedia

{{cite press release |last1=Marullaz |first1=Lidia Tamellini Jeanne |title=CBAM must not be used to export pollution |publisher=Carbon Market Watch |date=16 July 2025 |url=https://carbonmarketwatch.org/2025/07/16/cbam-must-not-be-used-to-export-pollution/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{marullaz2025cbam, author = {Marullaz, Lidia Tamellini Jeanne}, title = {{CBAM must not be used to export pollution}}, publisher = {Carbon Market Watch}, year = {2025}, month = jul, url = {https://carbonmarketwatch.org/2025/07/16/cbam-must-not-be-used-to-export-pollution/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }