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The report proposes 'Inclusion of Consumption' (IoC) as a way to ensure carbon prices are reflected in the cost of materials like steel and cement, which are currently shielded by free allowance allocations in emissions trading schemes. By adding a charge to the consumption of these materials based on benchmarks, the IoC aims to incentivize material efficiency and innovation without harming competitiveness. The authors argue that IoC is administratively feasible, compliant with WTO law, and qualifies as an environmental regulation under EU law.

The policy brief argues that current carbon pricing mechanisms, which use free allowances to prevent carbon leakage in industrial sectors, eliminate the price signal for mitigation beyond primary production efficiency. To address this, the authors propose 'Inclusion of Consumption,' where a consumption charge is levied on carbon-intensive materials (such as steel, aluminum, and clinker) based on benchmark emission values and the carbon price. This charge would apply to all domestic consumption regardless of origin, making it compatible with WTO law. The mechanism would use duty suspension arrangements to track materials through the value chain, with the charge becoming due only when the good is released for consumption. The brief notes precedents in Asia (South Korea, China, Tokyo) regarding electricity consumption and discusses potential implementation in Europe and the United States.

The document outlines a proposal to introduce a 'Charge' for carbon-intensive goods, such as steel and clinker, based on the EU ETS permit price and Best Available Technology (BAT) benchmarks. Drawing on the European excise system, it suggests a 'Production Sphere' where registered 'Carbon Keepers' and 'Carbon Warehouses' can handle goods under duty suspension, and a 'Consumption Sphere' where the charge is triggered upon sale to unregistered entities or final consumers. The report recommends a Carbon Monitoring and Control System (CMCS) for tracking movements and the use of de minimis thresholds for imports based on the ratio of carbon value to product value.

The report assesses how carbon pricing affects the competitiveness and investment strategies of energy-intensive industries (EIIs). It finds that while carbon costs are a factor, they are often secondary to energy and raw material prices. The analysis highlights the risk of carbon leakage, where production shifts to regions with lower emissions costs, particularly as demand grows in Asia. The report emphasizes that current short-term policy horizons, such as the EU's 2020 targets, are insufficient for the 20- to 40-year investment cycles typical of these sectors, suggesting a need for longer-term regulatory certainty and support for breakthrough technologies like Carbon Capture and Storage (CCS).

The undersigned authors express concern that a provisional agreement on RePowerEU would weaken the EU Innovation Fund by allowing Member States to use its grants (60%) and front-loading ETS allowances (40%) to raise revenues. They argue that reducing the fund contradicts the needs of Europe's industrial transformation, noting that the fund's first call in 2021 was oversubscribed by more than 20 times. The letter highlights that nearly 50% of emissions reductions needed for 2050 goals depend on technologies not yet deployed at scale, particularly for hard-to-abate sectors like cement, steel, and chemicals. The authors warn that while the United States is implementing massive investment plans, the EU risks losing its industrial base and jobs if it fails to lower the cost of next-generation decarbonisation technologies. Finally, they urge Member States to reject the European Commission's proposal to auction allowances from the Market Stability Reserve, as this could increase emissions and lower the carbon price signal.

The document assesses the challenges of the EU's proposed CBAM based on incurred emissions, noting that it fails to fully address carbon leakage for exports and value chains. It proposes an alternative 'climate contribution' based on standardised carbon intensity factors, which would act as an excise charge that can be passed along the supply chain and waived for exports. This model, combined with Carbon Contracts for Difference (CCfDs) funded by CBAM revenues, is presented as a way to create immediate investment incentives for climate-neutral production of materials like steel, cement, and aluminium.

Carbon Market Watch argues that a Carbon Border Adjustment Mechanism (CBAM) is preferable to the free allocation of allowances in the EU ETS, provided it is implemented without double protection. The organization recommends that CBAM cover cement, steel, chemicals, and power, and that its revenues be primarily disbursed as climate grants to developing countries. It further suggests that Least Developed Countries and Small Island Developing States be exempted from CBAM obligations to uphold the principle of common but differentiated responsibilities.

The document argues that the EU Emissions Trading System (ETS) has functioned as a subsidy for high-emitting industries, providing €50 billion in windfall profits while failing to reduce emissions. The authors call for a full phase-out of free allowances by 2032, a 10% annual reduction starting in 2026, and the introduction of a fully operational Carbon Border Adjustment Mechanism (CBAM) by 2026. They further propose making any remaining free allowances conditional on energy efficiency and decarbonisation plans, and revising benchmarks to include a minimum improvement rate of at least 0.4%.

The analysis examines how US universal and sectoral tariffs affect Latin American countries, noting that while Mexico and Central American nations face higher effective tariff rates, South American nations are more vulnerable to indirect shocks from China. It highlights that China's ability to implement counter-cyclical fiscal and monetary policies to mitigate US tariff impacts will determine the stability of commodity prices and growth in South America.

The document highlights how current life cycle assessments (LCA) in the Canadian built environment can mislead decision-makers due to data gaps and a lack of transparency. It specifically notes that LCAs often ignore biogenic carbon emissions from wood products—which can account for up to 72% of a product's total life cycle emissions—and overlook regional variations in material production and disposal. The briefing recommends that the federal government invest in updated regional and national LCA inventories and prioritizes energy efficiency and material longevity as the primary drivers for decarbonizing buildings.

The paper examines the fragmented landscape of emissions intensity benchmarks and accounting methodologies for the cement and steel industries, which together contribute approximately 15% of global emissions. It argues that the current 'patchwork' of differing thresholds and methodologies increases compliance costs for businesses and hinders the international trade of low-carbon materials. To enable market growth and effective industrial decarbonization, the author advocates for greater harmonization, improved data quality, and interoperability across global standards.

The World Resources Institute (WRI) provides research and policy recommendations to support the United States' transition to a low-carbon economy. Its work spans industrial modernization in sectors like cement and steel, the deployment of renewable and clean firm power, and the development of carbon dioxide removal (CDR) strategies. WRI also focuses on systemic barriers such as permitting reform for energy transmission, the responsible sourcing of critical minerals, carbon pricing, and the electrification of transportation, including a specific initiative for electric school buses.