CBAM on the other side of the Atlantic

A lot has happened in the US election campaign in recent weeks. The Democratic Party has replaced its leading candidate with Joe Biden and is now likely to send Kamala Harris into the race. race. The economy here in Germany is looking enviously across the Atlantic, to Bidenomics and the Inflation Reduction Act. But even there the discussion about shifting greenhouse gas emissions is in full swing. in full swing. There are various legislative proposals on how this be prevented.

PROVE IT Act

This bipartisan legislative proposal provides that the emissions of imported goods would be determined per unit of weight, per dollar value or another suitable unit of measurement. This initiative is not about putting a price on emissions, but rather providing instead to create transparency about the emissions embodied in the goods. embodied in goods. To this end, a reporting and therefore monitoring obligation emissions is to be introduced.

Foreign Pollution Fee Act

This legislative initiative was introduced by Republican senators and provides for emissions-intensive imports into the United States of America United States of America would be priced. The emissions burden of the imported goods would be priced according to the average emissions intensity intensity of the product in the exporting country compared to the intensity of the same product in the USA. A comparable national pricing of goods manufactured in the USA is not provided for in the proposal. It is therefore This is therefore not a border adjustment like CBAM. Instead the proposal would unilaterally burden imported goods and strengthen the position of American producers.

Clean Competition Act

This democratic proposal comes much closer to the European CBAM. much closer. It provides for both national pricing for emission-intensive goods as well as one for corresponding imported imported goods. In each case, however, pricing only takes effect when the emission emissions intensity exceeds a set average.

MARKET CHOICE Act

Another cross-party proposal also provides for national pricing. national pricing. To this end, it would replace existing federal taxes on vehicles and kerosene with a more comprehensive tax on CO2 tax. Similar to the Clean Competition Act, the initiative also provides for taxation of corresponding imported goods. In addition Furthermore, even exports are to benefit from a refund of the CO2 tax. tax. This makes it very similar to the classic border tax equalization.

Outlook

It is clear that an ecological trade policy is in the interests of both political political camps. Even if it is certainly based on different underlying motives. On the Republican side, protectionist protectionist considerations seem to be in the foreground. The Democratic proposal endeavors to appear origin-neutral. The cross-party proposals show, however, that it may not depend so much on the outcome of the dependent on the outcome of the US elections as to whether such a mechanism mechanism is used. Rather, it is the more detailed design, the ecological orientation of the measure.

Support

If you need support in implementing the requirements of the CBAM please contact us directly (helge@kolum.earth). We will also help you to make your company fit for CO2 pricing in international in international trade.