Weakening the #EU #ETS would increase regulatory risk, delay investment decisions and undermine Europe’s #climate leadership.
Ahead of the European Council, we’re urging EU leaders to safeguard a strong and predictable carbon pricing framework.
Read more 👉 sandbag.be/2026/03/11/e...
📢Good news for CBAM!
The EU Commission ruled out suspending the EU’s Carbon Border Adjustment Mechanism #CBAM for #fertilisers.
👉 Read more about CBAM and fertilisers: sandbag.be/2026/02/10/c...
📢 Carbon capture, storage and utilisation (CCS/U) is often presented as a key solution for Europe’s chemicals sector, but what role can it realistically play?
Our analysis finds that CCS/U has more limited potential in the sector than you might think.
👉 Our analysis: sandbag.be/2026/03/02/c...
📢 The EU ETS free allocation benchmarks are under heavy pressure from industry, says Sandbag to Carbon Pulse
👉 Read the article: carbon-pulse.com/486273/
We held a workshop on how the EU #CBAM boosts Algeria’s iron exports at a conference in Algiers hosted by @giz.de and the Algerian Ministry of Hydrocarbons and Mines.
Find out how iron can benefit from the CBAM.
👇 Read the brief:
sandbag.be/2026/02/20/e...
💶🌍A strong, predictable carbon price under the EU ETS is essential.
Weakening that certainty risks delaying modernisation and diverting clean investment elsewhere.
Today we call on national leaders at the informal European Council meeting to recognise the importance of the EU ETS.
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For Sandbag, the evidence is clear:
• The ETS is the central investment signal for industrial decarbonisation
• The existing cap trajectory is already embedded in multibillion euro project pipelines
• Maintaining a strong cap and phasing out free allocation is needed to drive further investment
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📢 EU Industry Summit and Informal EU Leaders’ Retreat: Future competitiveness and ETS stability go hand-in-hand
🇪🇺EU leaders meet today for the Informal EU Leaders’ Retreat, with industrial competitiveness at the centre of discussions following yesterday’s EU Industry Summit.
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Since EU producers are likely the marginal suppliers, it is their costs, not importers’, that will likely drive the EU market price.
❗CBAM alone is unlikely to drive significant fertiliser price inflation.
👇 Read the full briefing:
sandbag.be/2026/02/10/c...
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🔎 Key findings:
• CBAM costs for importers and CBAM-induced price rises in the EU are not the same
• For Egyptian urea in 2026, costs could reach €42/t using default values
• Using actual emissions data, costs fall to €7.4/t
• For EU producers, CBAM-linked costs are €1.79/t
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📉 Fertiliser inflation in 2026: to what extent is CBAM the cause?
Recent projections suggest CBAM could raise fertiliser prices by up to 30%.
But what does the evidence show?
A new Sandbag analysis examines how CBAM costs play out for one key nitrogen fertiliser: urea.
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📬 Sandbag’s January newsletter is out!
As CBAM enters its implementation phase, we cover:
• Commission impact assessment citations
• CBAM dialogues in Africa
• Chemicals & CBAM expansion
• Steel & circular economy updates
👉Read it here tinyurl.com/2r93x2dj
👉Subscribe sandbag.be/newsletter-s...
Sandbag analysis referenced internationally
As CBAM enters its first phase, international media across the UK, Middle East, Asia and Australia are drawing on Sandbag’s analysis.
The consistent assessment: CBAM supports EU decarbonisation, with limited early impacts on prices and the economy.
👇 Sandbag analysis cited in the Impact Assessment:
Strengthening the CBAM by default — feedback on downstream extension, anti-circumvention and electricity emissions rules
🔗 sandbag.be/2025/08/06/s...
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⚠️Proposed coercive actions could protect against carbon leakage but would add bureaucracy.
🔄An opt-out from actual data reporting should be available for trade partners, with default value mark-ups dropped—if all imports from a country use those values instead of actual data.
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⏱️While no further specific anti-circumvention measures are set out, the proposal empowers the Commission to act “within three months” where there is “sufficient evidence” of a “high risk of abusive practices”.
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Sandbag’s July 2024 analysis “Closing the CBAM scrap loophole – a critical move for climate & competitiveness” is cited in this context.
The Commission proposes including pre-consumer scrap in CBAM emissions for steel and aluminium products.
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The European Commission’s CBAM Impact Assessment (17 Dec) shows that circumvention risks are now being taken seriously.
The assessment explicitly recognises risks of avoidance, including via metal scrap—concerns Sandbag has consistently raised over the past year.
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Free allocation will be phased out under the EU ETS — regardless of CBAM. A better safeguard would be extending CBAM to agricultural products grown using nitrogen fertilisers, covering embedded emissions, rather than weakening the policy.
👇 Open letter from the French PM
tinyurl.com/mrxx72s9
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But CBAM is phased in gradually alongside free allocation under the EU ETS.
As a result, the price increase should only be around:
• 2026: +€2.4/t (+0.4% vs no CBAM scenario)
• 2027: +€4.8/t (+0.8%)
🔍 Ammonia is only one input — so impacts on most fertilisers are even lower.
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📉 An exemption will do nothing in 2026–27.
The CBAM-related price increase for EU farmers buying ammonia is very small in the first two years of CBAM implementation.
Under a fully implemented CBAM (0% free allocation), the increase would be ~€97/t of pure ammonia (from price €600 in 2023).
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🇫🇷 France is calling for fertilisers to be exempted from the EU’s Carbon Border Adjustment Mechanism (CBAM).
The French Prime Minister has published an open letter to farmers raising concerns about fertiliser costs.
Our analysis shows this would be the wrong approach.
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🔗 Read our recent policy brief on chemicals in the CBAM:
sandbag.be/2025/11/25/c...
📄 Read the European Commission’s CBAM review report:
taxation-customs.ec.europa.eu/document/dow...
#CBAM #EUETS #ClimatePolicy #Chemicals
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🏗️ The door is also open to refinery products, with the report noting that challenges “do not appear insurmountable” for these key precursors.
📆 However, despite these positive signals, the Commission will only assess whether to propose CBAM expansion in 2027.
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⏱️ While vertical extensions were prioritised, the Commission sets out a notably conservative timeline for horizontal expansion
🔍 What the report includes:
• Chemicals inclusion deemed “technically feasible”
• A suggested phased approach, starting with key value chains
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🧭 CBAM horizontal scope expansion — encouraging signs, but why the delay?
The European Commission’s CBAM review sets out its approach to horizontal expansion, potentially covering chemicals, refinery products, pulp & paper, glass, ceramics and ferro-alloys.
#CBAM #ClimatePolicy
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🔍 Often overlooked
CBAM is not a one-way flow to the EU.
Where EU price pass-through is effective, exporters can gain more than they pay. These revenues can support clean industrial growth, provided anti-circumvention rules are enforced.
👇Research note:
sandbag.be/2025/12/24/t...
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🇬🇭 Ghana
Aluminium exports already generate a net gain of ~€4m/year.
If additional output were exported to the EU, EU price pass-through (~€156m) would outweigh CBAM fees (~€74m), delivering a net gain of ~€82m/year, even without deeper decarbonisation.
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🇳🇦 Namibia
Planned projects in hot briquetted iron (HBI) and hydrogen show strong upside.
CBAM-related EU price increases could generate €287–322m in additional export revenues, with gains rising as EU ETS free allocation is phased out.
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🌍 The CBAM dividend for Ghana and Namibia
CBAM is often seen as a threat to developing-country exporters. New case studies of Ghana and Namibia suggest the opposite: EU price effects linked to CBAM can outweigh CBAM costs, turning the mechanism into a net gain.
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