The lack of clarity and guidance on the EU's carbon border management mechanism (CBAM) has undermined its policy objectives and created trade friction, said panelists at the CBAM summit in London, hosted by Goyder consulting firm, which Callanish attended.
One of the panelists said that CBAM is a "lighting problem" that has "activated the entire network" around the world, and not an isolated regional trade problem. They noted that CBAM could become a "powerful catalyst" for global carbon pricing, but warned that "the devil is in the details" because there is not enough detailed guidance.
They added that market participants are "operating in a very difficult environment," risking unnecessary trade frictions that complicate and weaken the global supply chain.
"Ultimately, this undermines what is a very important political goal," they concluded.
A second panelist said that mistakes in the implementation of CBAM had led to a paralysis in the industry's response. They stressed that many companies "have very little idea how significantly CBAM will change their work."
They added that "the transition period was wasted," and warned that medium-sized companies would suddenly find themselves having to pay bills. Other companies, meanwhile, will not take CBAM seriously and will conclude deals that they will not be able to earn when they have to pay for CBAM certificates.
"There have been changes along the way, and many businesses say they expect further changes," they noted. The panelist also said that the EU should make it clear that "enforcement is now real; this tax has already been introduced."
"This is not a theory, it's a practice," said a third panelist, who added that large companies have an understanding, but it is "becoming more and more vague" as the size of the company decreases. "Today, there is no need to publish comprehensive information so that the business has clarity. It needs to be published, and it needs to be clear," they added.
The second panelist asked why the European Commission had not used the data and lessons from the transition period to determine the default values. "The methodology is not based on information about the transition period," they stressed. It was "a big missed opportunity to collect accurate data and learn from it, and it's disappointing."
.They see this as a "chicken-and-egg situation" where companies are very distrustful of the data they collect because none of it has been verified. They also emphasized that communication with
