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Wednesday, April 10, 2024

The US is expected to be minimally impacted by CBAM, and may experience some benefits

The US is expected to be minimally impacted by CBAM, and may experience some benefits.

Recent analysis by the Climate Leadership Council (CLC) suggests that the US stands to benefit from the EU's Carbon Border Adjustment Mechanism (CBAM) compared to other major economies like China and India. Due to the relatively lower carbon emissions intensity of US-made products covered by CBAM, the country is expected to pay fewer fees than others, potentially leading to increased demand for its exports in the EU market.

According to CLC's study, only a small fraction of US exports to the EU fall within the categories covered by the CBAM, representing just 1.1% of the total export value. In contrast, countries like China face a higher CBAM cost burden due to their larger exports of CBAM-covered goods to the EU. The report highlights the potential for US steel imports to gain traction in the EU market, especially considering the lower CO2 intensity of US steel production, which relies heavily on recycled scraps.

However, the impact of CBAM implementation on global trade patterns remains subject to various factors. Nonetheless, the analysis suggests a shift in trade dynamics by 2026 when CBAM fees take effect.


Via The Climate Leadership Council


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