According to the Sandbag and E3G environmental think-tanks report, the main burden of introducing the world's first tax on the import of goods with the highest carbon footprint (CBAM, Carbon Border Adjustment Mechanism) will fall on consumers in EU countries, and not, as previously assumed, on countries exporting their products to the European Union.
The project to introduce a tax on the import of such goods as steel, aluminum, cement, fertilizers or electricity is part of the plan aimed at achieving climate neutrality by the EU by 2050. The project was initially sought to complement plans to make the purchase of CO2 emission permits compulsory for sectors of the EU economy, other than energy. Currently, permits must be purchased by companies from the energy sector, and their cost, even up to EUR 60 per ton, is already the equivalent of two-thirds of the wholesale energy price in Poland. The tax was also introduced to prevent companies from relocating production related to EU emissions to countries with more lax regulations. From 2026 onwards, the share of import goods subjected to this obligation is expected to grow by 10% annually, reaching 100% in 2035.
In the Fitfor55 package presented in mid-July, the European Commission presented several options for introducing the fees at the borders. The ideas include the form of excise duty and sales of certificates. The variant preferred by the European Commission is the gradual introduction of the necessity for importers to purchase certificates. The number of certificates would depend on the emissivity of the production of a given good, and the price would depend on the prices of emission allowances sold under the European Emissions Trading System (ETS).
Exporters from countries where emission charges are already imposed would receive a rebate or a full exemption from the CBAM system. Hence it was expected that the tax would directly hit countries with less restrictive regulations, which would in turn lose their European market to local producers. But according to the Sandbag report, the EU's trading partners who protested against the plans to introduce the levy, especially China and Russia, will bear relatively little costs. "The cost will be mainly borne by European consumers, to whom importers will pass on most of their cost increases," the report said.
There are many more concerns about the effectiveness of the planned tax, because its implementation will be complicated and take a long time. It is to be collected from 2026, in the meantime importers will only be asked to provide carbon footprint estimates related to imported products. Calculating the CO2 emissions associated with specific products can be difficult due to the lack of data, says James Whiteside, responsible for commodity market analysis at Wood Mackenzie.
Analysts of the Polish Economic Institute (PIE) estimates that the reduction of emissions in EU countries due to the partial abolition of free allowances and the introduction of the carbon tax will amount to 14% in 2030, and in the rest of the world - 0.3%. Betelsmann Foundation deems tax-related reduction in global CO2 emissions at even less than that - 0.2%. In return, the German think-tank proposes to introduce a minimum amount of fees for CO2 emissions in the world, which, however, could be much more difficult to introduce.
According to the analysts of PIE, the decrease in imports due to the introduction of the border carbon tax may reach 12%, depending on the variant of introducing CBAM compared to the baseline scenario, in 2030. Exports from the EU may also decrease by the assumed reach 11%, compared to the baseline scenario. The changes in exports, as explained, are related to an assumed loss of free allowances by European producers.
Currently, the most valuable group of products imported to the EU from the sectors covered by CBAM is steel and iron - imports amount to EUR 36 billion, followed by aluminum (EUR 17 billion). They are also the main import groups in the case of Poland.
Sources:
https://businessinsider.com.pl/finanse/ue-planuje-importowy-podatek-weglowy-sa-pierwsze-szacunki-skutkow/7brg7xp
https://forsal.pl/biznes/ekologia/artykuly/8214829,fitfor55-graniczny-podatek-weglowy-redukcja-emisji-w-ue.html