The Norwegian government has submitted its views to the European Commission’s consultation on the Carbon Border Adjustment Mechanism (CBAM). Norway emphasized that, while its domestic industries, particularly in primary aluminum, ferroalloys and silicon metal, already operate with significantly lower lifecycle emissions due to renewable electricity, they remain vulnerable to carbon leakage and unfair competition.
Welcoming the commission’s initiative, Norway stressed that a stronger CBAM is essential to maintain the competitiveness of hard-to-abate industries during the green transition.
Closing loopholes in CBAM
Norway underlined that CBAM will only succeed if loopholes are closed. Excluding downstream products risks shifting production outside the EU, harming upstream producers. While acknowledging the difficulty of defining which downstream goods should be included, Norway recommended prioritizing those most closely linked in price to CBAM-covered products.
The government also urged continuous monitoring and updates to tackle circumvention. For example, process scrap in the aluminum sector or the use of substitutes should be addressed. Stronger emissions reporting standards and verification rules were highlighted as critical.
Tackling anti-circumvention risks
Norway noted that not all circumvention risks can be predicted. Therefore, CBAM should be designed to evolve with emerging threats, ensuring loopholes do not undermine its effectiveness.
Focus on imported electricity
Norway indicated that it pays special attention to the electricity sector, stressing that emission factors for imported electricity must be calculated consistently across all importers from the same country or bidding zone. Clear rules are also needed to incentivize third countries to decarbonize their energy systems, preventing carbon leakage in cross-border power trade.
