Next German govt likely to support EU carbon border mechanism – state secretary

Germany’s prospective next government coalition will likely support EU plans to introduce a carbon border adjustment mechanism (CBAM), said Jochen Flasbarth, state secretary in the environment ministry in an industry event at the sidelines of the UN climate change conference COP26 in Glasgow. “The outgoing government has committed to this and that is also how I understand the paper of the possible next coalition partners,” said Flasbarth. The SPD, the Green Party and the pro-business FDP are currently in negotiations to form Germany’s next government alliance. They said in a preliminary agreement that they support the “Fit for 55” reform proposals by the European Commission. The proposed package includes the CBAM. However, the instrument was not yet designed, cautioned Flasbarth. “I don’t think any government would say ‘I’ll buy it, no matter what you guys put in this black box’,” he said. A border adjustment mechanism would always be a “ride on the razor's edge” for an export-oriented country like Germany, and developing the CBAM in the right way would be “a huge issue” for the next government’s foreign climate policy.

The European Union is taking steps towards introducing a carbon border adjustment mechanism, an instrument that has been hailed as a stimulus for climate action but also branded as a way to spark new trade wars between the bloc and its trading partners. As the EU is pursuing a higher climate-neutrality target and a green overhaul of its entire economy, the mechanism that has importers pay if their product has a higher carbon footprint than their European counterparts leaves many industries and non-EU governments concerned.