Implications of CBAM for Contracting Parties discussed at Energy Community high-level event in Brussels

22 May 2022

With the conclusion of the negotiations on the European Commission’s proposal on the carbon border adjustment mechanism (CBAM) around the corner, the Energy Community brought together key stakeholders to take stock of the opportunities and challenges posed by the implementation of the CBAM instrument. Participants recognized the beneficial role that CBAM could have on incentivizing increased decarbonization efforts and compliance with the Energy Community emission reduction rules.

The event underlined that several pilot projects and initiatives related to carbon pricing were under way in the Contracting Parties. However, these efforts must be sped up in order to comply with the requirement of having an emission trading system in place by 2030 and thus qualify for an exemption from the CBAM levy on power exports to the EU.

Member of the European Parliament Thomas Waitz said: “Even under the current market and security conditions, we should not forget that coal-related investments will lead to stranded assets. The integration of Contracting Parties in the European internal electricity market should also mean embracing the same rules and standards for clean electricity generation while at the same time giving appropriate policy answers to energy poverty.”

Energy Community Director Artur Lorkowski said: “The Energy Community Secretariat is in a unique position and stands ready to monitor the policy developments and compliance linked to the exemption conditions in the CBAM Regulation. The Secretariat will do its utmost to assist Contracting Parties in their legal and policy changes in order to become fit for CBAM.”

Naser Nuredini, Minister of Environment and Physical Planning of North Macedonia, highlighted: “Aligning and coordinating our national efforts on the regional level is very important. Contracting Parties have different renewable potentials and different consumption patterns. A stronger coordination on a strategic level could reduce the costs for the individual national economies.”