How CBAM can be a tool for renewable energy expansion globally

Ecohz has sent a response to the European Commission’s Call for Evidence regarding the potential of the Carbon Border Adjustment Mechanism (CBAM). In it, we reitarated our long-standing message: emissions legislation must rely on credible energy tracking mechanisms that allow all types of companies to act and choose renewables.

For the CBAM to fulfil its potential to incentivise renewable energy expansion globally, it should:

1) Utilise the tested and transparent energy tracking systems that already exist worldwide, such as I-RECs and North American RECs. These systems reliably convey attributes relating to the renewable and sustainable nature of electricity production, ensure unique ownership and prevent double counting, and make it possible for companies to match their consumption with the production of the associated energy.

2) Avoid limiting procurement options to Power Purchase Agreements (PPAs), as this would disproportionately impact small and medium-sized enterprises. Energy tracking methodologies should also remain adaptable in countries with different energy sectors.

3) If the Commission decides to limit procurement to PPAs, the requirements should be kept understandable and solid. Lack of clarity is already a cause of uncertainty in global PPA markets, preventing new PPAs from being signed.

Ecohz vision remains to change energy behaviour. The CBAM has, under the right conditions, enormous potential to help realise this goal.

You can read our response in full here.