The EU carbon border adjustment mechanism: implications on Brazilian energy intensive industries

The EU carbon border adjustment mechanism: implications on Brazilian energy intensive industries

DATE: November 2nd, 2023
AUTHORS: Sigit Perdana | Marc Vielle | Thais Diniz Oliveira
JOURNAL: Climate Policy
TITLE: The EU carbon border adjustment mechanism: implications on Brazilian energy intensive industries
SHORT DESCRIPTION:

As an instrument supporting the realization of EU climate neutrality targets by 2050 and encouraging decarbonization outside its borders, the current proposed Carbon Border Adjustment Mechanism (CBAM) is facing opposition from some countries. Focusing on Brazil, this paper evaluates the impacts of the CBAM on the Brazilian economy through a comprehensive analysis of various scenarios based on the potential EU implementation of the CBAM and Brazil’s climate scenarios. Results obtained in this research alleviate concerns of detrimental and competitiveness losses from Brazilian industries. Rather, the implementation of the EU CBAM improves the trade balance of Brazil’s Energy-Intensive Industries (EII). The relatively low CO₂ contents of Brazilian EII are elemental to this result, while contributions of carbon-free technologies in electricity generation are also critical factors in maximizing this trade surplus. Other consequential factors affecting these results are the contributions of CO₂ removal from Brazil’s forestry of land used, and homogeneity of CBAM-imposed products.

JOURNAL LINK: https://doi.org/10.1080/14693062.2023.2277405
ZENODO LINK:
SYNERGIES:
Perdana, S. P., Vielle, M., & Diniz-Oliveira, T. (2023). The EU carbon border adjustment mechanism: implications on Brazilian energy intensive industries. Climate Policy