Comparing Policy Options to Address Export-related Carbon Leakage
The role and potential of innovation support
Jakob, Michael and Mehling, Michael (2023): Comparing policy options to address export-related carbon leakage. The role and potential of innovation support. Ecologic Institute, Berlin
From 2026, the European CO₂ border adjustment (CBAM) will ensure that European industrial companies remain competitive despite rising CO₂ prices. The CBAM thus enables an ambitious European climate policy through effective emissions trading. However, the CBAM only covers imports into the EU: The question of whether and how the EU should take action to ensure the competitiveness of exporting companies is still unresolved. This study analyzes different approaches to ensure the competitiveness of export-oriented companies and evaluates them based on different criteria. While a free allocation of certificates as well as export subsidies score poorly in the evaluation, the study authors recommend targeted innovation promotion as a particularly beneficial policy instrument.