The new frontier of European Environmental policies: the Carbon Border Adjustment Mechanism

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The European Union has long been a leader in the global fight for a more sustainable and environmentally conscious society. With the European Green Deal adoption in 2019, it demonstrated its commitment to becoming the world's first climate-neutral country by 2050. The Green Deal provides a comprehensive plan to transition to a green economy while addressing social, economic, and environmental challenges. It includes and promotes several policies regarding reducing greenhouse gas emissions, promoting the use of renewable energy, and conserving biodiversity. The EU Emissions Trading System (EU ETS) is a program that creates the world's largest carbon market and sets a cap on the total amount of greenhouse gas emissions that EU countries can produce. Meanwhile, the Renewable Energy Directive, introduced in 2009 and updated in 2018, targets the share of renewable energy production. It aims at increasing the use of renewable energy sources at 20% by 2020 and at least 32% by 2030. In May 2022, the Commission proposed to raise the target to 45% by 2030. The EU has also taken several initiatives to promote circular economy, an economic model focused on reducing waste and promoting the recycling of resources. On this aspect, it has set targets for recycling and reducing the amount of waste generated. It has also introduced measures to support the development of new technologies to reduce waste. Furthermore, with its Biodiversity Strategy for 2030, the EU also plays an active role in preserving biodiversity, supporting conservation efforts, and implementing measures to protect habitats and wildlife.

On 13 December 2022, the Union set another milestone for a greener society. The European Council and European Parliament agreed on implementing the Carbon Border Adjustment Mechanism (CBAM). Before it is final, the Member States and the European Parliament need to confirm it. However, this mechanism will work provisionally from October 2023. Its operations will begin with the aim of collecting information, and only subsequently it will be gradually implemented in its entirety. The project will become completely operational on 1 January 2026. The goal of CBAM is to “equalize the price of carbon paid for EU products operating under the EU Emissions Trading System and the one for imported goods” (European Parliament). This system will, in fact, oblige companies that import products into the EU to buy certificates for CO2 emissions that exceed the limits set by EU rules. CBAM targets imports of products in carbon-intensive industries. In this way, it prevents emissions reduction within the EU from being made by relocating productions to other countries with weaker restrictions. It also avoids European businesses from being undermined by their foreign competitors that do not have to comply with climate-related regulations. This mechanism will be applied to iron, steel, cement, aluminum, fertilizers, electricity production, and hydrogen at the beginning. During the period of provisional application, the Commission will periodically assess the program to check whether to expand it also to other products. The purpose of this project is explained by the words of a Dutch politician who took part in the negotiations, which stated that this crucial policy is the only mechanism the EU can use to incentivize other countries to decarbonize their manufacturing industries. The proposal has faced criticism from European trade partners such as Turkey, China, Britain, and the United States, as they consider this measure trade protectionism. However, EU officials replied that it creates a level playing field, and they continued to promote their carbon pricing initiative. African countries also criticized CBAM, claiming it could cause a rapid deindustrialization of countries focused on exporting to the EU.

Source: Climate Action Tracker, retrieved on BBC website

In conclusion, the European Union's implementation of the Carbon Border Adjustment Mechanism is a bold move towards its goal of becoming a climate-neutral continent by 2050. This initiative demonstrates the EU's leadership and determination to address global environmental challenges and to build a more sustainable future for all Europeans. Climate change, deforestation, pollution, and biodiversity loss are critical issues we must address to secure a sustainable future for ourselves and future generations. To successfully overcome these problems, we must adopt more ambitious plans and policies prioritizing environmental protection, such as CBAM. Still, much more needs to be done. We must increase investment in renewable energy and energy efficiency, reduce our dependence on fossil fuels, and protect critical ecosystems, such as forests and wetlands. Governments, businesses, and individuals have a role to play in this effort; to achieve that, we must all work together. However, a single country cannot achieve results just with internal regulations. It is also imperative that we strengthen international collaboration to tackle these global issues. Climate change knows no borders, and it is only by working together that we can make the significant reductions in emissions required to prevent the worst outcome. The European Union understood that protecting our environment is not an option, is a necessity. It is time for us to step up and make the necessary changes to safeguard our planet for future generations. Our society must take decisive action and work together internationally to secure a sustainable future for all.