Carbon Border Adjustment Mechanism for Climate | Addressing carbon leakage to strengthen global climate action
France is honoured to convene representatives of the European Commission, international organizations, EU Member States and third countries, academics and experts, and civil society stakeholders to a high-level conference on carbon leakage and the Carbon Border Adjustment Mechanism, which will be held on Wednesday, February 12th, 2025 in the afternoon in Paris.
Accelerated collective action is needed to meet the climate emergency and the ultimate goals of the Paris Agreement to limit the rise in the planet's temperature to well below 2°C above pre-industrial levels and to continue action to limit this rise to 1.5°C. To meet this urgent need for action, in 2020, the EU adopted the Fit for 55 package which aims at providing a coherent and balanced framework for the EU’s climate objectives, with the goal of making the EU climate-neutral by 2050. In parallel, although more than 100 countries have also committed or are considering long-term objectives of carbon neutrality, differences in climate ambition in the short and medium terms are significant. As a consequence of this climate ambition gap, the risk of carbon leakage is increasing and threatening to impede global progress.
Carbon leakage refers to the situation whereby ambitious climate policies implemented in a region or country lead to increased emissions in less ambitious regions through the reallocation of production, thus undermining both the effectiveness of these ambitious climate policies and their social acceptability. In the end, carbon leakage unfairly displaces our emissions to other countries, leaving them polluting more in order to produce the goods we need and consume. Carbon leakage could thus severely compromise the effectiveness and acceptability of the EU’s emission reduction policies and decarbonisation efforts.
In order to meet this challenge, the EU formally adopted the EU Carbon Border Adjustment Mechanism (CBAM) in April 2023. It aims to ensure – in full compliance with international trade rules – that the EU’s emission reduction efforts are not offset by increasing emissions outside its borders through the relocation of production to non-EU countries or through increased imports of carbon-intensive products. CBAM therefore targets imports of products in carbon-intensive industries. It is designed to function in parallel to and to fully mirror the EU’s emissions trading scheme (ETS), and will gradually replace the free allocation of EU ETS allowances to address the risk of carbon leakage.
One year on from entry into force, and a year into the transitional period, the time has come to take stock of implementation progress and explore the future evolutions of the regulation to make sure it is fit for purpose to effectively tackle carbon leakage and respond to the challenges faced by EU industries. More work is also needed to ensure a unified and cooperative global approach to meet the challenge of global emissions reduction.
The main objective of this public high-level event will be to discuss central issues raised by implementation of the EU’s Carbon Border Adjustment Mechanism, as well as its future developments. One year after entry into force, it will be an opportunity to take stock of the implementation of the CBAM Regulation, communicate broadly and transparently on the purpose and objectives pursued by the instrument, the state of international cooperation on the issue, as well as the main issues raised by future evolutions of the CBAM. The conference will bring together European political leaders, industry representatives, academic and experts, representatives of international organizations and civil society stakeholders from EU Member States and third countries in order to share views on the topic. The debates will be organized around three round tables, and will focus on (i) the lessons learnt from the first year of implementation of the CBAM (ii), and the evolutions of the CBAM to expect in the coming years (iii), cooperation with third countries on carbon pricing.