The Impact of Carbon Border Adjustment Mechanism (CBAM) on the Competitiveness of Cement exporters to the EU: The cases of seven major cement exporters to the EU (Turkey, Ukraine, Tunisia, Algeria, Morocco, Colombia, and Belarus)
Authors
Mehryar, Hemn ; Ntacyicumutindi, Epimaque
Term
4. Term
Publication year
2021
Submitted on
2021-08-16
Pages
67
Abstract
As part of its plan to reach climate neutrality by 2050, the European Union is considering a carbon border adjustment mechanism (CBAM). This policy would charge imports for the carbon emitted during their production, to reduce carbon leakage (when production moves to countries with weaker climate rules) and to keep EU firms competing on similar terms. This thesis examines what CBAM could mean for non-EU companies that export cement to the EU. We estimate the extra costs CBAM would add for seven major cement‑exporting countries and what that implies for their price competitiveness. We then take a closer look at policy preparations in three of these countries to assess whether new rules — such as carbon pricing and emissions‑reduction requirements — could help their firms adapt to CBAM. Our results indicate that CBAM would significantly weaken price competitiveness for all major cement exporters to the EU, and that this effect would grow over time as free allocations of emission allowances are phased out. However, the impact is smaller in countries where cement is produced with lower carbon intensity. We also find that domestic policies in exporter countries — especially introducing carbon pricing and regulations that curb emissions — can ease firms’ adjustment to CBAM and improve their chances of keeping market share in the EU.
Som led i sin plan om at nå klimaneutralitet i 2050 overvejer EU at indføre en såkaldt carbon border adjustment mechanism (CBAM). Det er en ordning, der pålægger importvarer en pris svarende til den CO2, der udledes under produktionen. Formålet er at mindske kulstoflækage (at produktion flyttes til lande med svagere klimaregler) og at sikre fair konkurrencevilkår for EU-virksomheder. Dette speciale undersøger, hvad en CBAM kan betyde for virksomheder uden for EU, der eksporterer cement til EU. Vi beregner, hvor store ekstraomkostninger CBAM vil påføre syv store cementeksporterende lande, og hvad det betyder for deres pris- og konkurrenceevne. Dernæst analyserer vi i dybden tre af disse landes politiske forberedelser for at vurdere, om nye regler — som kulstofprissætning og krav om emissionsreduktion — kan hjælpe virksomhederne med at tilpasse sig CBAM. Resultaterne viser, at CBAM vil svække priskonkurrenceevnen markant for alle store cementeksportører til EU, og at effekten vil vokse, efterhånden som gratis tildeling af udledningstilladelser udfases. Effekten er dog mindre i lande, hvor cement produceres med lavere CO2-intensitet. Vi finder også, at nationale tiltag i eksportlandene — særligt indførelse af kulstofpriser og regler, der reducerer udledninger — kan lette virksomhedernes tilpasning til CBAM og forbedre deres muligheder for at fastholde markedsandele i EU.
[This apstract has been rewritten with the help of AI based on the project's original abstract]
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