IETA publishes overview of international reaction to EU’s carbon border levy

At its annual European Climate Summit taking place this week in Florence, Italy, IETA published an overview of the international response to the European Union’s Carbon Border Adjustment Mechanism (CBAM). 

The publication includes country-level analyses of the EU’s major trading partners and draws on World Bank analysis of the respective exposure of various countries to the CBAM.

IETA’s overview finds that in response to CBAM, some countries are considering introducing their own carbon border levies, including the United Kingdom and Australia. 

While Canada may choose to enter into bilateral agreements with the EU, South Korea is considering changes to its own domestic ETS. 

A number of countries are also sceptical about CBAM; South Africa calls it discriminatory, India is considering retaliatory measures and China has raised concerns within WTO. 

“CBAM is making waves around the world, although it is still a decade before the system will be fully in place” said Julia Michalak, EU Policy Director at IETA. 

“It has triggered varying reactions ranging from threats of WTO challenges to commitments to establishing domestic carbon markets. It is a policy that cannot go unnoticed,” Michalak added.