The fragmentation of regulation
Ursula von der Leyen currently resembles a child building sandcastles. In her second term of office, the EU Commission President is busy tearing down the bureaucracy that was painstakingly built up during her first term. A first element of her „Omnibus“ legislative package was adopted at a rapid pace. According to the Commission's calculations, 90% of importers will be excluded from the Carbon Border Adjustment Mechanism. Only those who import goods weighing more than 50 tonnes per year will still be subject to the requirement.
Steel importers at a disadvantage
What sounds like an ecologically sensible adjustment – after all, those who import a lot also cause higher CO2 emissions – turns out to be a questionable approach on closer inspection. For example, the CBAM hits steel importers much harder than aluminium importers in terms of turnover, although the production of aluminium is many times more CO2-intensive than that of steel. And in the case of polyester, the disparity between import value and weight and CO2 emissions is even greater in some cases.
The EU Commission wants to ease the burden on SMEs in particular. However, when it comes to reducing the burden on companies, categorising imports by volume is a very poor choice. This is because it does not apply to representatives of different sectors and imported goods according to their capacity to bear the burden. This would have to be based on turnover, for example. In addition, personnel needs, which are important for compliance, is not taken into account. And as the example of steel and aluminium shows, the focus is not even on climate protection. Especially as efforts to promote green steel from Europe are currently paralysed for various reasons. Just recently, Arcelor cancelled a project for green steel from Germany, despite the promise of billions in funding.
Measured with many different yardsticks
The amendment to the law primarily ensures that the group of companies that are exempt from the CBAM CO2 due to their low import volumes will grow significantly in future. New standards threaten to be applied to other deregulation measures. If this first example of deregulation sets a precedent, the EU will not just be applying double standards, but rather a multitude of them. The result would be a fragmentation of regulation – and a reduction in the burden that does not do justice to either efficiency or climate protection.