How is the CBAM compatible with other ETS systems outside the EU?
The CBAM will ensure that imported goods will get “no less favourable treatment” than EU products, thanks in particular to three CBAM design features:
- the CBAM takes into consideration “actual values” of embedded emissions, meaning that decarbonising efforts of companies exporting to the EU will lead to a lower CBAM payment;
- the effective carbon prices paid outside the EU will be deducted from the adjustment to avoid a double price.
- the price of the CBAM certificates to be purchased for the importation of the CBAM goods will be the same as for EU producers under the EU Emissions Trading System (EU ETS); and
This carbon price paid in a third country could for example be due to an established emissions trading system. The Commission will, before the end of the transitional period, adopt secondary legislation to design the rules and processes to take into account the effective carbon price paid abroad. During the transitional period, reporting declarants need to report the carbon price due in a country of origin for the embedded emissions in the imported goods, taking into account any rebate or other form of compensation available.
Source: EC’s Questions and Answers on CBAM