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Fit for 55 could weaken EU industrial competitiveness

Monday, July 26, 2021


Further strengthening of the EU Emissions Trading System (ETS), combined with phasing out free allocations and introducing a Carbon Border Adjustment Mechanism (CBAM), looks likely to expose European industry to upward cost pressures at a time when they need capital to invest in emergent low-carbon industrial processes.


  • 'Carbon leakage' remains a big concern: while relocation usually has multiple motivations, it may well increase as EU carbon costs rise.
  • Supply chain pressures look likely to push costs up both for EU industry and the renewables sector.
  • Major investment opportunities exist in the areas of renewable energy and alternative fuels infrastructure.

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