The debate over the European Commission's proposal to extend the scope of the EU's Carbon Emissions Regulation Mechanism (CBAM) to processing industries is heating up, as the European Mechanical Processing and Equipment Manufacturers Association (VDMA) calls for the complete abolition of the carbon leakage control mechanism.
Describing the "insurmountable bureaucratic difficulties" that CBAM poses to European industrial SMEs, the VDMA draws attention to the 2.6% annual reduction in the workforce in German industry and engineering, which highlights the problems of these sectors, explaining the losses to difficult business conditions as a result of excessive EU regulation and pressure from Chinese imports
.Thus, in various press releases and media publications, the VDMA calls for "the abolition of the entire CBAM mechanism, or at least a fundamental review," further arguing that "plans to extend[CBAM]to additional industrial processed products should be discontinued."
Referring to a recent survey of members, the association claims that "76% of engineering companies receive reliable emissions data from less than 10% of suppliers from third countries. As a result, companies are forced to use the[default values]ratio for more than 90% of their CBAM declarations."
"Collecting verified emission data for specific products has proven to be extremely difficult and sometimes impossible in practice," the report says. "Suppliers often lack the technical capabilities, data infrastructure, or regulatory incentives to provide emission data in accordance with EU requirements."
The industry body claims that as a result of the expected difficulties with verification and, as a result, the use of default values, the engineering sector will have to purchase 30% more CBAM certificates than other sectors "where access to emissions data is easier", which exposes European production to the risk of inflationary costs and replacement imports are putting pressure. beyond what the industry can handle. According to the VDMA, "the acceptable limits have been reached" – 40% of respondents to the survey are reportedly considering moving production outside the EU due to CBAM, and more than a third expect a reduction in the workforce.
In January, the CBAM program entered its final stage, setting carbon costs for imports in full in line with what the relevant producer would have to pay if it operated under the EU's Emissions Trading System (ETS). This is done to prevent "carbon leakage" – the movement of domestic
