Position on the EU “Fit for 55” package: Emission Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM)

AFEP strongly supports the European objective of climate neutrality by 2050, as well as the increased climate objective of the EU for 2030. As demonstrated by AFEP’s platform Ambition 4 Climate, French companies are engaged in the energy and climate transition. They therefore welcome the proposals in this package. They are particularly mindful that the proposed framework be able to trigger the unprecedented amount of investment needed for the transition, while maintaining economic activity within  Europe.

In particular:

  • AFEP supports the revision of the EU ETS to align it with the EU’s increased climate ambition and meet the investment challenge.
  • AFEP is concerned about the impact of the new rules for the allocation of free allowances, particularly concerning benchmarks, which could weaken companies that are exposed to the risk of carbon leakage, before they can undertake their low-carbon investments in Europe.
  • AFEP is in favour of the introduction of a CBAM. As demonstrated in our impact assessment (January 2020), the CBAM is the most effective tool to fight against the risk of carbon leakage provided it is accompanied by strong support measures, such as WTO-compatible subsidies.
  • AFEP is in favour of a voluntary participation of sectors, the examination of a possible mechanism to compensate for the effects on the downstream sectors, and an extension of the period during which all the free allowances are maintained to ensure the robustness of the CBAM.
AFEP Position on Fit for 55 - ETS and CBAM