Norway calls for strengthening EU CBAM to prevent carbon leakage and close loopholes

The Norwegian Government has submitted its views to the European Commission's consultation on the Carbon Boundary Adjustment Mechanism (CBAM). Norway emphasized that although its domestic industries, especially 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 needed to maintain the competitiveness of hard-to-reach industries during the green transition.

Closing loopholes in CBAM

Norway stressed that CBAM will only be successful if the loopholes are closed. The exclusion of processed products may lead to the transfer of production outside the EU, which will harm the producers of processing. Recognizing the difficulty of determining which goods should be included in the processing, Norway recommended that priority be given to those goods that are most closely related in price to products covered by CBAM.

The government has also called for constant monitoring and updating to combat circumvention. For example, technological scrap in the aluminum sector or the use of substitutes should be considered. Stricter emission reporting standards and verification rules were highlighted as critical.

Fighting the risks of circumvention

Norway noted that not all bypass risks can be predicted. Therefore, CBAM should be designed in such a way as to evolve in accordance with emerging threats, ensuring