An in-depth evaluation of the EU Carbon Border Adjustment Mechanism (CBAM) and its impact on carbon leakage protection and industry transformation. This project, conducted for the German Emissions Trading Authority (DEHSt), assesses the effectiveness of CBAM in mitigating carbon leakage risks while fostering industrial decarbonization.

Key activities include:

• Legal and economic impact assessment: Evaluating gaps in CBAM’s current legal framework and its ability to protect against carbon leakage.
• Scenario analysis: Examining potential extensions of CBAM to new sectors, products, and indirect emissions.
• Quantitative modeling: Assessing economic and trade implications of CBAM reforms, including export rebates and value chain effects.
• Policy recommendations: Identifying necessary adjustments to CBAM and EU ETS to improve competitiveness and transformation incentives.
• Stakeholder engagement: Supporting DEHSt and BMWK in negotiating CBAM-related regulations and providing input into EU policy processes.

The project supports Germany’s strategic positioning in EU ETS reforms and provides data-driven insights into future CBAM developments.