Episode 1094: Think Tank: COP28 flags need for regulatory tools such as CBAM

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With COP28 pushing climate change up the news agenda, we untangle the mysteries of the EU’s Carbon Border Adjustment Mechanism (CBAM) and explain what it means for chemicals and fertilisers. -          CBAM puts price on carbon for imports to Europe-          Potential cost of €3.2bn for fertiliser importers, based on 2022 imports, prices-          Covers iron, steel, aluminium, fertilisers, electricity, hydrogen-          Price will be same as existing European Trading System (ETS)-          Importers will pay for the cost of carbon-          Transitional reporting ends 2025, charging phased in 2026-2034 (2.5%-100%)-          Designed to ensure level playing field for imports and local production-          Chemicals get around 75% free allowances for CO2-          Could fall to zero if chemicals added to CBAM likely after 2030-          EU allowance currently €75-80/tonne-          European Commission aims for all imports to be covered by CBAM