İstanbul Chamber of Industry “The Agenda of Production and Trade Changed by The Climate: The Eu Carbon Border Regulation Mechanism Panel” Was Held

Speaking at the İstanbul Chamber of Industry's meeting with the theme "The Agenda of Production and Trade Changed by the Climate: EU Carbon Border Adjustment Mechanism," TÜRKÇİMENTO CEO Volkan Bozay stated, "Low-carbon production is a development model; therefore, all sectors need to undergo this transformation."

The European Union Carbon Border Adjustment Mechanism (CBAM) will be implemented on October 1, 2023. Initially, CBAM will apply to the import of certain goods and selected intermediate goods that are carbon-intensive and have the highest risk of carbon leakage. These include cement, iron and steel, aluminum, fertilizers, electricity, and recently added hydrogen.

Free Allocation is an Incentive For Low Carbon Productıons

Reminding that within the European Union, free allocations have been provided to the cement sector and about 50 other sectors under the Emission Trading System since 2005, creating an economic balance, Volkan Bozay continued as follows:
"Free allocation is not an exemption. It is an incentive for factories producing with a low carbon burden. Starting from 2026, the free allocation applied to cement producers in the EU will also be applied to imported products. This allocation will gradually decrease for both EU producers and importers. By 2034, with the complete removal of free allocation in the EU, a carbon fee will be charged for the entire carbon burden in the exported product content. In other words, the carbon fee to be paid by the importer for the product will gradually increase. However, it is expected that over time, carbon clubs discussing the expansion of the scope of CBAM, which is on the agenda of the United States and other developed countries, will affect a larger part of our exports. To mitigate the effects of CBAM, it is important for our industry to transition to low-carbon cement production. If a fully compliant emission trading system with the European Union is established in our country, assuming a carbon price of 100 Euro/ton CO2, additional carbon costs of 15 to 80 Euros will need to be applied to products in the domestic market gradually after 2026. This creates a situation that will adversely affect the end consumer."

Volkan Bozay emphasized that the cement sector is in close cooperation with the public, especially to increase the consumption of low-carbon cement in the domestic market. He stated, "Our goal is to enable the use of such cements in public tenders. Without alternative fuels that play a significant role in the circular economy for low-carbon production, it is very difficult to make progress. Until a sufficient level of alternative fuel production is achieved in our country, allowing the import of alternative fuels that comply with standards can open up opportunities for the industry in the short term. On the other hand, emission trading systems should primarily support producers in making their own green investments. TÜRKÇİMENTO is allocating energy and resources to initiate studies. However, larger resources are required for pilot and/or industrial-scale studies."