Episode 934: EU chemicals may lose free carbon credits, double costs, under CBAM legislation

EU petrochemical producers may see carbon-related costs more than double to €4.1bn/year once the Carbon Border Adjustment Mechanism (CBAM) comes into force.  -          EU chemical producers will lose free carbon credits if CBAM applies-          This will more than double carbon taxes on chemicals to €4.1bn at 2021 prices-          Aim is to incentivise low carbon investment by producers-          Under CBAM imports to EU will face same carbon costs applied to domestic producers-          From Q3 2023-2026 data will be gathered on chemical sector imports, emissions-          From 2026-2035 CBAM will be phased in, no decision yet on chemicals-          Refinery products may be targeted for CBAM before more complex petrochemicals -          US Inflation Reduction Act (IRA) may be better approach to low carbon future