From Climate Policy to Climate Partnerships

This policy brief has been created with partners from the EPICO KlimaInnovation. The objective of the policy brief is to explore how the EU can uphold the competitiveness of domestic industries, while progressing international climate cooperation and maintaining credible carbon pricing. To this end, this policy brief analyses one crucial challenge of the EU Carbon Border Adjustment Mechanism (CBAM): While aiming to support domestic producers on the EU market, the CBAM does not provide equivalent protection for exporters who intend to compete in markets without similar carbon costs. A central argument of the policy brief is that the EU should not weaken its carbon price, but instead integrate a broader strategy including strengthened cooperation with partner countries to decarbonize, stronger emissions monitoring and a bigger recognition of vulnerable economies. Importantly, the policy brief argues to expand investment to make low-carbon industrial projects financially viable.