APPLiA, the European association grouping home appliance producers, has voiced concerns over the proposed Carbon Border Adjustment Mechanism (CBAM) and its potential effects on production delocalisation, Kallanish notes.
Paolo Falcioni, APPLiA director general, says that if CBAM is introduced the way it is proposed now, it will lift raw materials costs and impact the competitiveness of the European downstream manufacturing industry.
“Let’s take the case of a washing machine manufactured in Europe. Its production requires on average 25kg of steel, 4kg cement (as part of concrete) and 3kg aluminium. All materials that will be subject to the CBAM proposal. Under the current ETS system in place, the CO2 price for these materials amounts to €90/tonne of CO2,” Falcioni explains. “EU-based home appliance manufacturers will face an increase in the cost of raw materials for the production of one washing machine ranging between 5-10%.”
As a consequence, “the EU’s proposed CBAM seems not to bring any added value in addressing the issue”, he adds. On the contrary, “products that are manufactured abroad and imported into the EU will be more competitive than EU-made ones on the home market of many European companies.”
According to Eurofer calculations, domestic appliances account for some 3% of the total European consumption of steel.
“There is no quick or easy solution here. CBAM alone, even extensively revised, cannot fix the problems it creates. The European Commission should present a legislative proposal two years ahead of the removal of free allowances in ETS, foreseen as from 2026,” Falcioni observes. “This would secure the funding pillars of the EU including the competitiveness of all European industries, EU jobs, global sustainability leadership and resilience among others, while also satisfying WTO trade requirements.”
Emanuele Norsa Italy