Germany to launch CBAM awareness campaign
German emissions trading authority Dehst is launching an awareness campaign on compliance with the EU's carbon border adjustment mechanism (CBAM), as many companies have still not registered or handed in the mandatory report at the end of the first reporting phase.
"It appears that a large number of companies do not know that their imports fall under CBAM," Juergen Landgrebe, head of climate action, energy and emissions trading at Germany's federal environment agency UBA — which hosts Dehst — told Argus. The awareness campaign is being run by industry federation BDI and the German chamber of commerce and industry DIHK.
Dehst cannot quantify the number of missing reports, as only the companies will know whether or not they fall under CBAM, Landgrebe said. It is possible that some companies are unaware that CBAM applies to their imports, he said.
Import of supposedly minor products such as screws also fall under CBAM, head of Dehst's economics unit Jan Weiss said at the E-World conference in Essen last week.
Landgrebe commended the flexible reaction of the European Commission, which has introduced a "late button" on its CBAM platform and extended the reporting deadline. The first report was due on 31 January, but registration has only been possible since 12 January because of technical issues. No one will incur a disadvantage for being late, Landgrebe stressed.
The EU's CBAM aims to prevent so-called carbon leakage — whereby companies relocate to other jurisdictions to avoid carbon costs — in sectors covered by the bloc's emissions trading system, and is initially being applied to cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Reporting obligations began with the launch of the transition period on 1 October, while the levy on imports will be phased in from the start of 2026.
CBAM is already having positive effects, Landgrebe said, with countries such as Turkey and Taiwan looking into the carbon intensity of their export products.
Related news posts
UK High Court rules Cumbria coal mine permit unlawful
UK High Court rules Cumbria coal mine permit unlawful
London, 13 September (Argus) — The UK's High Court has quashed planning permission granted in 2022 for a coal mine in Cumbria, northwest England, ruling the approval was unlawful. The court judgment found the greenhouse gas (GHG) emissions that would result if the coal was burned — known as scope 3 emissions — were not properly considered during the planning process. The proposed mine's developer, West Cumbria Mining, said it would produce a "net zero coal product", using methane capture and abatement, renewable power, "tree planting… and offset of minor residual emissions". But the judgment found the secretary of state at the time, Michael Gove, acted unlawfully in accepting that claim. The UK's Climate Change Act does not allow reliance on international offsets to meet the country's legally-binding carbon budgets. The then-Conservative UK government granted permission for the mine — set to produce metallurgical coal, used in steel production — in December 2022 to West Cumbria Mining. Environmental groups Friends of the Earth and South Lakes Action on Climate Change sought a judicial review, a challenge to the way in which a decision has been made by a public body, focusing on the procedures followed rather than the conclusion reached. The UK's Labour government, elected in July, said it would not defend the planning decision in court. The government will now have to reconsider the planning application, taking into account the "full climate impact", Friends of the Earth said. "West Cumbria Mining will consider the implications of the High Court judgement and has no comment to make at this time", the company told Argus . Today's ruling referenced a landmark June judgment from the UK's Supreme Court, which found that Surrey County Council's decision to permit an oil development was "unlawful because the end use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment". The outcome has prompted the UK government to develop new environmental guidance for oil and gas firms . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's Bndes unveils line of credit for reforestation
Brazil's Bndes unveils line of credit for reforestation
Sao Paulo, 12 September (Argus) — Brazil's Bndes development bank launched a new reforestation program that has earmarked R1bn ($180mn) in credit for companies to plant native tree species. The new line of credit can be used for a broad range of forestry-related industries and is not limited to projects in the Amazon basin. The program will also fund agro-forestry projects for the production of fruit, nuts, coffee and other products. Of the total funding available for the program, R456mn will come from the Bndes' Climate Fund and the remainder from a line of credit targeting environmental protection. Interest rates for the loans will be capped at 2.5pc/yr for a maximum of 300 months. The bank will not lend more than R100mn to a single project. The new line of credit is in line with the government's goal of replanting 12mn hectares of native vegetation by 2030. Climate authority President Luiz Inacio Lula da Silva said the country will create a climate authority and technical-scientific committee to "support and coordinate the federal government's actions to combat climate change." "Our focus needs to be on adapting and preparing to face weather phenomena," Lula said, without adding details on the authority nor the committee. The announcement comes as Brazil is facing droughts and fires in several regions. The drought throughout the country is the worst in 75 years, according to the national center for monitoring and alerts for natural disasters Cemaden. The drought in the Amazon basin specifically is the worst in 45 years. Southern Rio Grande do Sul state was also ravaged by floods in late April-early May. "We are experiencing a perverse combination of factors that are creating this situation," environment minister Marina Silva said. "Climate change is changing the rainfall pattern, the dry and flood periods, as you are seeing. Sometimes it rains too much, sometimes it rains too little." Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU CBAM certificates should be tradeable: Turkey
EU CBAM certificates should be tradeable: Turkey
Berlin, 12 September (Argus) — Turkey, one of the countries most exposed to the EU's carbon border adjustment mechanism (CBAM), has suggested allowing the measure's certificates to be traded, similar to EU emissions trading system (ETS) allowances, a Turkish official said at an industry event in Berlin this week. Allowing a CBAM certificate to be traded would enable an importer in the EU to have some credit allocated to them beyond what is necessary to cover the emissions content of the imported commodity, Turkey's deputy permanent representative to the EU, Bahar Guclu, said at the Innovate4Climate conference in Berlin. This would mirror the functionality of EU ETS allowances, Guclu said. Turkey has made this proposal to the European Commission but is yet to receive a response, Guclu told Argus on the sidelines of the conference. Under current rules, EU importers will have to purchase and surrender CBAM certificates issued by the bloc that will not be tradeable on the secondary market. Purchasers will be allowed to hold the certificates for up to two years, and sell a maximum of a third of those purchased back to the EU if they are not needed. Guclu also pointed out certain discrepancies that Turkey has noted in the measure, such as a number of Turkish companies that would not fall under the EU ETS if they were based in the EU now falling under the CBAM because they exceed the turnover threshold, even though their overall emissions are low. This "unfairness" may need to be remedied in the future by introducing a threshold focusing on emissions rather than corporate earnings, German economic affairs and climate action ministry policy officer, Philipp Voss, conceded. Voss negotiated the CBAM at EU level on behalf of Germany. But introducing a CO2 threshold will make the CBAM even more complicated from an administrative point of view, Voss said. The CBAM is dealt with by customs officers, who "don't know anything about carbon so far", Voss said. The CBAM is "not complete", Voss stressed, but the measure already appears to set the right incentives. Turkey is aiming to launch its ETS next year, ahead of the CBAM's full launch in 2026 following its current transitional phase. The CBAM has also played a role in the planned development of South Africa's carbon tax, the director of environmental and fuel taxes at South Africa's treasury, Sharlin Hemraj, said. South Africa's carbon tax, initially set at $16/t CO2, will be introduced in 2026. Some "interesting" interactions with the CBAM might arise in the context of emerging UN-regulated carbon markets under Article 6 of the Paris climate agreement, International Emissions Trading Association council director and chief executive of Canadian climate and energy law firm Resilient, Lisa DeMarco, said. An exporting country, or an exporter from a country with higher emissions intensity, might choose to attach internationally traded mitigation outcomes from Article 6 to a product, which the EU may or may not accept, DeMarco said. "I think we'll get some interesting trade dispute resolutions," DeMarco said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's CER undecided on SMC issuance details
Australia's CER undecided on SMC issuance details
Sydney, 12 September (Argus) — Australia's Clean Energy Regulator (CER) has not yet decided on the level of details that will be published alongside the upcoming safeguard mechanism credits (SMCs), while estimated issuance numbers remain within a "wide" range, delegates heard at a forum in Sydney. The regulator will start to issue SMCs early next year to safeguard facilities that report scope 1 greenhouse gas (GHG) emissions below their annual baselines. Each SMC will represent 1t of CO2 equivalent (CO2e) below a facility's baseline, which will have the option to either hold it for future use or sell it in the market. The CER has an estimated range of SMC issuance numbers for the July 2023-June 2024 compliance year, the first under Australia's reformed safeguard mechanism . But this range is "very wide" as several factors are at play, executive general manager Carl Binning told delegates at a safeguard mechanism forum organised by the regulator in Sydney on 11 September. SMC issuances will be "relatively modest initially" according to Binning, but volumes are expected to build up over time as companies intensify efforts to reduce emissions while baselines converge to industry averages. He declined to provide any internal estimates on SMC issuances. Australian companies need to submit their emissions and energy data under the National Greenhouse and Energy Reporting (NGER) scheme by 31 October, including covered emissions data for individual safeguard facilities. The CER is finalising the so-called energy intensity determinations for each facility, which will be used to set their baselines. Baselines will be based on a production-adjusted framework initially weighted towards site-specific emissions intensity values, transitioning to industry average emissions intensity levels by 2030. Under the reformed mechanism, facilities that emit more than 100,000t of CO2 equivalent (CO2e) in a fiscal year face declining baselines — at a rate of 4.9 pc/yr until 2030 — and need to surrender Australian Carbon Credit Units (ACCUs) or SMCs if their onsite abatement activities were not enough to keep their emissions below thresholds. Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW) late last year estimated SMC issuances would start at around 1.4mn units in the 2024 financial year ending 30 June 2024, rising to 7.4mn in 2030 and 10.3mn in 2035. Facilities that fall below the coverage threshold of 100,000t CO2e can choose to continue receiving SMCs for up to 10 years — with their baselines continuing to decline if they opt in — and the DCCEEW expects such issuances will be the main source of SMCs by 2035 (see table). Uncertain data level All safeguard facilities will need to give a breakdown of the surrendered ACCUs by the method under which they were generated for the first time from the 2024 financial year, as well as a breakdown of their emissions by CO2, methane and nitrous oxide. The CER will publish 2023-24 safeguard data by 15 April 2025. But while the regulator will also need to publish the number of SMCs issued to a facility, there is still no definition on whether it will disclose where SMCs surrendered by facilities came from, Binning told delegates. "One of the issues we're really wrestling with in the design of our new registry is how much information we tag," Binning said. "I think the marketplace is interested in more granularity… so I'd actually invite feedback on this topic," he added. The CER expects that the new registry replacing the Australian National Registry of Emissions Units (ANREU) will be operational by the end of calendar year 2024. It plans to issue SMCs into the new registry and transfer all ACCUs from the ANREU "gradually" over the following months before the start of the next safeguard compliance period. By Juan Weik Projected SMC issuances (mn) Financial year From safeguard facilities From below-threshold facilities Total 2024 1.36 0.05 1.41 2025 1.62 0.13 1.75 2026 2.27 0.06 2.33 2027 3.20 0.26 3.46 2028 3.52 0.22 3.74 2029 4.34 0.54 4.88 2030 5.67 1.77 7.44 2031 5.31 1.92 7.23 2032 5.29 3.75 9.04 2033 6.77 3.47 10.24 2034 5.82 4.72 10.54 2035 4.80 5.51 10.31 Source: DCCEEW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more