Page 18 - REM Annual Review 2021

REM AUGUST REM

Exporters
Meanwhile, exporters into the EU are already it’s an environmental measure.”
counting the cost and doubting the legality of “We are also ready to try to find the balance
the CBAM. between our ambition, and the necessity of
China has said that measures would expand global co-operation, because you need ambition
climate issues into trade in violation of inter- but also global co-operation to have results from
national principles and hurt prospects for eco- this point of view,” said Gentiloni.
nomic growth, Reuters reported. By 2030, the CBAM could affect imports into
The Russian government has estimated that the EU of up to €58.3bn per year, Fitch Ratings
the country’s exporters to the EU could face costs said.
of up to $7.6bn per year.
However, the CBAM rules allow any carbon Political initiative
payments made in the exporter’s home country Indeed, the whole CBAM issue could prove to be
to be offset against CBAM payments. This could “a diplomatic tightrope,” according to the Euro-
help encourage the development of carbon reg- pean Council on Foreign Relations (ECFR), a
ulations and a carbon price in Russia. think-tank.
Also, the fact that the scheme will only be up The EU is taking the global initiative on cli-
and running from 2026 means that industry in mate change by putting in place rules that other
countries such as Turkey, Ukraine and Russia countries must follow, although any weaknesses
have some time to become greener by investing in the CBAM systems and the wider Fit for 55
in new cleaner technology. packages could threaten to undermine Brussel’s
Meanwhile, Turkey, Russia and China, which climate leadership.
stand to be hit the most by the CBAM as they are “Diplomatic tact and attention to detail will
major exporters of the most vulnerable products, be critical in preventing the CBAM from under-
are the most likely countries to take legal action. mining the EU,” said Alex Clark, a visiting fellow
They could dispute the measure as anti-com- at the ECFR.
petitive in the World Trade Organization The CBAM is a start, and an innovative one
(WTO). However, the EU has been careful at that, to extend the price of carbon into more
to avoid double taxation and discrimination areas of industry. While ultimately it will be the
against exporters into the EU and is confident consumer that may well have to absorb higher
that it would stand up to any test by the WTO. costs, the EU wants a carbon price to simulate
Paolo Gentiloni, the EU’s Economy Commis- investment in greener technology and more vig-
sioner, stressed: “CBAM as we call it is not a tax, orous efforts in reducing carbon emissions.™

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