CMW feedback on a potential downstream extension of the CBAM and new anti-circumvention rules

Carbon Market Watch argues against scrapping the CBAM despite industry complaints about administrative complexity, suggesting instead that the EU quantify actual carbon leakage and circumvention risks before expanding the mechanism to downstream products. The organization emphasizes that complementary EU policies like the Digital Product Passport and international standards can mitigate administrative burdens. It further recommends providing special treatment for Least Developed Countries (LDCs) and Small Island Developing States (SIDS) to align with UNFCCC principles.

• Extending the CBAM to automotive products could result in a slight global emission decrease of 3.2–5.2 Mt CO2, but may increase net emissions within the European Union by approximately 20.5 Mt CO2. If priced at EUR120 per tonne from 2034, this could generate EUR2.4 billion for European governments to reinvest in clean technologies and adaptation.
• Carbon Market Watch opposes industry calls to scrap the CBAM and return to the EU ETS free allocation system, noting that EU governments lost approximately 40 billion euros to free allowances in 2023 alone.
• The document asserts that administrative complexity should not be a barrier to CBAM implementation because carbon pricing is becoming more common globally and EU policies like the Digital Product Passport (DPP) and the Ecodesign for Sustainable Products Regulation (ESPR) will streamline data collection and compliance.
• The European Commission is urged to quantify carbon leakage and circumvention risks, as the last thorough assessment of carbon leakage was published in 2013 and found no evidence of such leakage up to 2012.
• The CBAM should include special treatment for Least Developed Countries (LDCs) and Small Island Developing States (SIDS) to reduce administrative burdens and respect the UNFCCC principle of "common but differentiated capabilities and responsibilities," noting that most of these states, except Mozambique, are not major exporters to the EU.

APA

Tamellini, L. (2025). CMW feedback on a potential downstream extension of the CBAM and new anti-circumvention rules. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2025/08/202508219-CMW-CBAM-downstream-and-circumvention.pdf

Chicago

Tamellini, Lidia. CMW feedback on a potential downstream extension of the CBAM and new anti-circumvention rules. Carbon Market Watch, 2025. https://carbonmarketwatch.org/wp-content/uploads/2025/08/202508219-CMW-CBAM-downstream-and-circumvention.pdf.

Wikipedia

{{cite press release |last1=Tamellini |first1=Lidia |title=CMW feedback on a potential downstream extension of the CBAM and new anti-circumvention rules |publisher=Carbon Market Watch |date=19 August 2025 |url=https://carbonmarketwatch.org/wp-content/uploads/2025/08/202508219-CMW-CBAM-downstream-and-circumvention.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{tamellini2025cmw, author = {Tamellini, Lidia}, title = {{CMW feedback on a potential downstream extension of the CBAM and new anti-circumvention rules}}, publisher = {Carbon Market Watch}, year = {2025}, month = aug, url = {https://carbonmarketwatch.org/wp-content/uploads/2025/08/202508219-CMW-CBAM-downstream-and-circumvention.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }