Position paper - Addressing the risk of carbon leakage under the EU ETS and CBAM

Transitioning to a greener economy will be the challenge of our time. American companies in Europe are already researching, developing and investing in technologies that will be instrumental in reaching this overarching ambition. 

The European Commission has proposed implementing a Carbon Border Adjustment Mechanism (CBAM) to combat carbon leakage and phase out the EU Emissions Trading System (ETS)’s free allowance. In a new paper, AmCham EU explores the connection between CBAM and ETS, outlining ideas to build a CBAM that protects European export competitiveness in markets that have lower or no carbon prices and strengthens the EU’s ability to stem carbon leakage.

Industry’s investment projects are assessed on a global scale, and the EU must offer investment conditions that are attractive compared to those in other regions. With an adjustment for exports, the EU can not only keep the playing field even for businesses but also protect our planet.

Read AmCham EU’s perspectives on how to improve the CBAM and learn more about its impact on international trade below.