CBAM extension to home appliances is a promising first step

The European Commission today presented its Strengthening CBAM proposal, announcing the extension of the Carbon Border Adjustment Mechanism to selected finished products, including washing machines, refrigerators and dryers. APPLiA, representing Europe’s leading home appliance manufacturers, welcomes this long-awaited and necessary step while cautioning that the limited scope of the extension will leave out significant volumes of embedded emissions unaddressed.  

The initial CBAM scope only covered basic materials such as steel, aluminium, and cement. As a result, finished goods containing a high share of these materials - including large home appliances, which on average contain 70% of CBAM covered materials - would be imported without facing equivalent carbon costs. As free ETS allowances are gradually phased out, this imbalance would place European manufacturers at a competitive disadvantage and increase the likelihood of carbon leakage. 

Commenting on the proposal, Paolo Falcioni, APPLiA Director General, said: "For many years, our sector has highlighted the shortcomings of CBAM’s limited scope. Today’s proposal represents an important first step toward closing loopholes for certain products. However, excluding other equally steel and aluminum intensive goods means the Mechanism will not yet fully live up to its ambitions. Products manufactured in Europe and outside the EU must compete on a level playing field.”

Beyond a more ambitious scope extension, policymakers will also need to work on robust and workable methodologies to assess embedded emission. While calculating embedded emissions inevitably  adds complexity, it is essential  to ensure a level playing field. At the same time, practical approaches  that make appropriate use of default values, will be critical to keep the system operational and manageable for authorities and businesses alike. 

APPLiA stands ready to support the legislative process with technical expertise, to help ensure CBAM evolves into a sound, future-proof instrument that effectively supports  Europe’s climate ambitions while safeguarding its  industrial base and covering all products at genuine risk of carbon leakage.