Good afternoon and welcome. My name is Elliot Wishington. I'm CISL's policy director and also the director of CLG Europe. It's Europe Facing Partnership of businesses working to advance the transition towards a sustainable economy. We're very pleased to welcome you today For what should be a really interesting conversation around our new research work are looking at The role of carbon border adjustment mechanisms and particularly in the light of the Europe's new proposal for a carbon border adjustment mechanism so we've got a packed set of attendees and Really informative conversations, which we will go through shortly We're going to start off with a couple of Welcoming remarks and then move into a presentation of our research followed by some reactions and reflections from various different people So so just to kind of cover that we've got Claire Shine, CISL's director and CEO And also Kasper Klinger vice president for European government affairs from Microsoft who very kindly supported this work The report will be presented by the research team Followed by a short Q&A session to kind of dig into any kind of technical details I need to help illuminate and explain any details that the people have Questions they have about the report followed by reflections are from both a mixture of Business commentators, but also EU member state third country representatives So we will have somebody from the French government somebody from the US climate leadership council, so Couple of different perspectives there, but then discussion of representatives within Europe. So we have the European Commission Somebody from the German Institute for international security affairs Respect from Microsoft and respect from SSAB Within that there will be time for some Q&A and some reflection and then it will bring it together for a close So hopefully hopefully we should have a really good conversation And we should really open up this important and yet complicated issue for further reflection For those of you who haven't already seen it on the handouts for today's session You could see the agenda Or for the conversation if you want to refer to it But also our new report and the biographies of all speakers so that if you want to look up any of their background details Feel free to Well, we have a number of speakers to hear from so you don't want to hear too much more from me I'm going to hand over without too much further ado to Claire Shine CISL's director and CEO and Claire is Active leader of CISL and and very keen to kind of help Advance this role of looking into the issues where we're establishing new questions helping us call out tomorrow. So Claire over to you Hello everybody and I hear a doorbell. So clearly my time has arrived It's a pleasure to be with you today and as Elliot said We're hugely ambition ambitious for taking this work with CISL and partners forward CISL has been working at the frontiers on climate since 1989 Steadily raising the bar for bolder ambition with business finance and government and through education and leadership Right now it would be so easy to think all roads lead to COP26 But the real test comes afterwards, of course Getting the change we need at the speed we need is going to need a bold reset of policy legal and business frameworks and an Integrated focus on benefiting people nature and climate So the research behind today's webinar is really groundbreaking and I know it is guaranteed to spark hot debate today and beyond Two quick observations from me first The EU has long been a leader in testing and modeling new policies and new ways to advance cross-border and region-wide sustainability the fit for 55 package launched in this summer is a really bold suite of policy proposals It is already stimulating energetic debate whether it can actually deliver that necessary Transformational change and thus provide a beacon a role model or something to do differently in other parts of the world Now the proposal to launch the CBAM. It's the first. It's a first in the world It's a bold step forward It's uncharted waters as the title says we're on the borderline here And it's going to test the relationship between different legal and policy regimes It raises far-reaching questions for the international trade regime and as many of you know so much better than me That intersect of trade green goods and services is going to be one of the most dynamic areas of international Progress over the years to come So for that reason, I'm really happy to join today's webinar in launching this report As Elliot said CISL seeks to call out tomorrow. We're looking very strongly at foresight Influence and reach. How do we both see what is coming down the tracks? Use the kind of networks that everybody on this call has access to to get that change quicker and have a reach in terms of Making ourselves understood making this work legitimate and thinking about that combined benefit as I said for people nature and climate Now this report in particular is breaking new ground even for CISL It brings together macro economic Econometric analysis and analysis of the legal and political acceptability and it covers a range of alternatives or compliments Depending which way the mechanism goes forward. It's hugely ambitious We're with the right people and I am enormously grateful to Microsoft for having supported and made this research possible So with that, thank you again for attending and now I'm delighted to hand over to Kasper Klinger Who is the vice president for European government affairs at Microsoft? Kasper the screen is yours Well, thanks very much Claire and and also thanks to you Elliot It's it's really nice to be here and to at least indirectly see all of you and and to be able to welcome you to what I think is an incredibly important event and launch today and We're sort of in the middle of the change of seasons and perhaps it is a good time to reflect a bit on what has happened in the past year One that unfortunately has continued to be challenging with the evolving health crisis to the floods We saw across Europe the wildfires and perhaps never it has been a more important Time to act and make progress on climate change than it is today and By doubling down as you also mentioned Claire on its commitments rather than easing off in times of crisis In many ways Europe has confirmed its leadership on sustainability from proposing an increased 2030 target for missions reductions to Turning Europe's climate goals into legal obligations and being the first major economy to put forward legislation to get it done I think all of this is in many ways enormously impressive and As part of that as part of the fit for 55 Legal proposal the carbon border adjustment mechanism has caught I think everybody's attention and Claire don't know if you use the word controversial But it's certainly not something as the report also shows that is is going to be easy to achieve It is in many ways the first of its kind proposal that opens up for an Important conversation around climate and trade and exposes the urgent need for common standards for carbon measurement and for accounting And the EU has demonstrated I think tremendous leadership in advancing the conversation around measuring carbon flows in the economy from reduction to removal and trade and With that advancing the transparency and accountability that progress also requires And you know, this is not only important It is important because we to have any hope of moving quickly along will need a common foundation or common taxonomy that ensures that carbon emissions are measured accurately consistently and reliable and I was going through the the report over the weekend and and I think what is so evident and so compelling in the report is that The issue that climate and change bring forward are not at all easy And it is in many ways for this reason that they require joint conversation. And this is why we are here today And I'll be honest and I think we all have to be honest and saying that we do not have all the answers I certainly don't. I think the experts that put this report together have more answers than I do Nor do we necessarily know all the questions that we need to ask in a complex area like the one we're dealing with today But I think what we do know and what the report spells out So clearly is that if we want to play a role in advancing our collective understanding We need to focus on the findings that this report's put together And this is exactly why we've been supporting from the Microsoft side a I think fantastic research team working on the different Dimensions of the proposed you see BAM as well as other trade related policies and how they interact with each other From economic and environmental impacts to legal political and diplomatic considerations The analysis came together through I think a fascinating report whose launch. We are super excited to support here today As a research team put it in the report, this is a conversation and perhaps also policy whose time has now come And we can expect to hear I think a lot about it in the years to come and I'm hopeful This will be one of the many interesting discussions that we can support and play a part in Let me say a few words about why it is that we have Microsoft are supporting this and how we see our role and responsibility, I think the first thing to say is that as a technology company as a global technology company we In a very principled way believe that digital technologies will play a vital role in supporting and enabling policies like this including on CBAM Through new digital tools, we can hopefully assist our customers our partners European governments global Governments in calculating and reducing emissions And that's exactly why in July we announced what we call the Microsoft cloud for sustainability Enabling our customers and our partners to report to record and to reduce their missions on their path to net zero We're eager to continue the conversation and play our part also in the years to come And I'm also hopeful that this conversation can help enable what I would call stronger Transatlantic ties where the European Union and the United States can act as catalysts for strengthening the geo politics of carbon around the world And I think the rapidly growing focus on reducing carbon emissions Advancing carbon measurement and improving environmental equity on both sides of the pond Gives really a renewed hope that this work will help bring every government to the table and if we can notch and force that You know work to happen and having governments come together Then I think we have played hopefully and help for role in this area And then looking at to to next week and to cop 26 I think we have a real opportunity to come together and reflect on how this can connect to the global conversation And how together we can move more quickly and more profoundly to create a net zero carbon economy in Europe and indeed around the world So with these few words, I would like to spend a little bit of time Embarrassing myself by thanking the research team for their work on the insightful report and by embarrassing myself Is that how I'm going to try and pronounce a lot of different and difficult surnames and I will in advance us for your Your gentle appreciation that I will try and do my very best in this regard First of all, let me thank dr. Sana Maken and the research lead for the Center for Policy and Industrial Transformation at CIS SL Let me thank dr. Who's who Lee Machiava the director of the European Center for International Political Economy? Let me thank Hector Pollitt the chief economist at Cambridge econometrics Let me thank Professor Horke even Wallace the Cambridge Center for Environment Energy and Natural Resource Governments And then let me also use the opportunity as one of the I guess co-host of today's event to to thank our guests That are going to contribute to the discussion today First of all Katrina or kid the vice president of policy for climate leadership council here Jeremy from the French ministry of the economy Antoine Colombani from the European Commission dr. Susanne Droge from the Stiftung vision shaft and politics and Thomas Hurnfeld from SS a B and Last but not least I want to thank my Microsoft colleague and my very good friend Alberto Arribas who will join the panel conversations later today And who knows a lot more about this topic than I will ever be able to Acquire in terms of knowledge and last but not least a warm Thank you to the CISL team Claire Elliot everybody on your side who made all of this happen today We and also me personally look forward to the presentation of the report and the reflections also from country Representatives and the panel conversations that will follow So let me end up by just once again thanking all of you and looking forward to the conversations we have today. Thanks Casper, thank you so much and thank you for your support or Microsoft support for helping make this possible Much appreciated and I think what it should be a very interesting fascinating discussion So both Casper and Claire gave us the title of the report on the borderline I should say to the audience and we have a large audience here on go to webinar But also in LinkedIn. That's also the hashtag. So if you want to discuss it in social media We're going to use that hashtag just so we can start to see what people's thoughts are what people's reactions are Take that feedback into account and and and build on it Now without too much further ado So the research team has been very helpfully introduced by Casper But I'm very pleased to ask Dr. Sanamaka and then the research lead in my team to Present and chief author of this report to present talk us through it. Thank you, Sana Many thanks, Elliot. Um, or can I have the next slide, please? Um, so this is the title of the report put together by a group of authors that Casper very kindly introduced We are an interdisciplinary And independent team of researchers and we've been working on this for about five months now and and obviously Very much looking forward to hearing your thoughts on this report. Can I have the next slide, please? So our report cover is various different topics. We start with an overview of sea bams as a policy instrument and We provide a quick overview of the reasoning for and against sea bams We then look at why the EU is proposing a sea ban and briefly outline the current EU sea ban proposal We then look at some economic and environmental impacts We assess questions around the legality We look at the potential political and diplomatic implications And we finish by looking at what some of the alternatives to sea bams would be next slide, please So the economic impacts to begin with So the modelling of the economic and environmental impacts was carried out by Cambridge Econometrics using their E3ME macroeconomic model So this is a well-established model that has previously been used many times by the European Commission Primarily in assessing their climate policy, but also other policies Including the 2030 impact assessment that came out last year The modelling involved various different scenarios with minor modifications And all of this detail is available in the report And the results show that the economic impacts would most likely be minor but positive for the EU So we're looking at 0.2 to 0.4 percent improvement in the EU GDP by 2050 And this is in comparison to a baseline whereby the EU would meet its 1.5 degree compatible CO2 emissions targets, but without a sea ban An EU sea ban could create around 600,000 jobs by 2050 These would be across sectors and if you just quickly look at the graph on the right Which you can explore in more detail in the report A lot of the economic and employment benefits actually come from The revenue recycling, so the sea ban revenue being recycled within the EU To reduce income tax and VAT The impacts on global level, so global GDP and some of the countries that we looked at in more detail Are generally very small But overall positive However, the GDP in Russia would most likely be adversely affected. Next slide please In terms of environmental impacts, the reduction in global CO2 emissions would be around 10 Megatons of CO2 by 2050 Which is about 0.023 percent of global emissions annually There would be a slight increase in EU emissions due to increased industrial activity within the EU So overall the main Environmental or emissions benefit would most likely come around from the sea ban if without a sea ban It would become impossible To maintain a high carbon price or an increase in carbon price within the EU And if this was the case The presence of a sea ban within the EU could actually result in About 912 megatons of CO2 savings per year By 2050 and as a result without a sea ban It would be impossible for the EU to meet its 2050 climate neutrality target. Next slide please So i'm not going to talk you through this slide in detail I'm just going to flag up that it's available in the report should you wish to look at it It sets out the various interrelationships between All of these factors that influence the emissions Outcomes and the environmental outcomes as well as the economic and employment impacts both Within and outside the EU. Next slide please So moving on to the legal analysis the legal analysis was carried out at four different levels First the basis for adoption. So whether a sea ban within the EU would be a Global treaty or an agreement among only a few states or whether it would be regarded as unilateral action The second level was looking at the rules of conduct In very basic terms, which rules may be breached by the sea ban Level three was looking at justification. So rules that could justify a violation of a rule of conduct and level four was looking at the remedies that could be Used to adjust the measure to bring it into compliance with either the rules of conduct or a justification So we then applied this Analytical framework to the EU's current proposal The proposed EU sea ban would most likely be treated as a unilateral measure So even though the EU is a group of 27 independent states From outside the EU the EU is still seen as a single entity In terms of the rules of conduct The proposed EU sea ban would most likely be regarded as a regulation That is equalizing the effects of another regulation in this case the EU ETS And the judgment as to whether domestically produced goods covered by the sea ban such as steel would be seen to be alike with imported goods is extremely important And if the goods are deemed to be alike regardless of their different carbon content the specific details Of the carbon equalization methodology Would be extremely important in determining whether the sea ban would be regarded as discriminatory And it's worth noting that some of these details have not been yet made fully available in the current EU proposal there is a fair chance that the EU EU sea ban Could amount to a breach of both the national treatment and the most favorite nations clauses However, this doesn't mean that it couldn't be justified It could be justified on the grounds that As a measure to reduce greenhouse gas emissions The sea ban would mitigate climate change and protect human life or health It could also be justified on the grounds that it is a measure relating to an exhaustible natural resource And ie stable climate system also could be the carbon budget for example And however, there is an open question as to whether the EU sea ban would be regarded as less trade restrictive than other available measures And it could also be seen as imposing the EU carbon price to other countries which could be problematic And however, even if the EU sea ban is seen to be in breach of international trade rules It could later be brought into compliance Next slide, please So the political and diplomatic considerations we looked at these both within the EU and internationally So within the EU it's extremely important that we consider the sea ban to be to be seen as a part of a bigger political agenda In particular in the context of the EU Green Deal It's going to be subject to lengthy Interinstitutional negotiations Through the process of a trilog that hasn't commenced yet The final proposal that emerges as a result will be shaved by both the EU's political economy And quite possibly some foreign pressures So it's likely to look very different to the current proposal In terms of member state views we cover some of these in the report They are still being formed. They're likely to be diverse. They're likely to be subject to change And in some member states the official view might actually be quite difficult to form because the perceptions are internally divided For example between producers and user industries Next slide please So looking at the international level The options that are available to third countries include retaliation, negotiation and litigation And these options can be bilateral or multilateral. They can be symmetrical or asymmetrical And we provide some examples of all of these in the report These response options are not mutually exclusive and they may be explored simultaneously or one after the other So if a country retaliates against the EU now it doesn't mean that they couldn't mitigate against the EU later The responses from trade partner countries will most likely be influenced by their current relationship with the EU As well as many of the country level factors such as the presence or absence of ETS or carbon price Some of the countries that rely heavily on the EU markets for their exports But are unlikely to qualify for an exemption Are likely to respond more aggressively In the report we provide specific examples of Ukraine, the UK, the US and Russia And it's probably worth noting that the litigation is unlikely to happen until the EU's eBam becomes a law But retaliation may take place much sooner. Next slide please So in section seven of the report we also looked at what the alternatives to eBams could be eBam is legally complicated and potentially politically very difficult And some of the other options that we looked at would be their so-called climate clauses in bilateral or multilateral trade agreements There could be multilateral processes under the WTO or OECD convener ship The development of new approaches under the trade and environmental sustainability structure discussions Or the formation of so-called climate clubs, which was discussed quite extensively in a very good online event by CEPS last week These could be used in conjunction with or instead of an EUC eBam Or it could also be possible that an EUC eBam could be the first step towards developing some of these other approaches Many of these approaches could potentially be much more effective in driving decarbonisation than the sole use of carbon pricing or equalisation measures in the EU However, like the eBam, these are subject to practical challenges And the extent of their tree potential has not yet been systematically assessed Next slide please So just in terms of conclusions, the politics of the current EU eBam proposal Does make WTO dispute quite likely But it doesn't mean that this dispute would necessarily result in a successful outcome If the EU is funked to be in violation of the trade rules, the measures can be brought I mean the cBam can be brought into compliance and this would be without any retrospective penalties being payable So the risk of retaliation or the loss of reputation as in EU the global champion of just transition And climate justice are actually much greater than the risk of litigation And the results of aligning that the standardized mechanisms that would need to be developed To measure carbon content in order to fairly implement a cBam could actually enable other climate policies To be implemented in the future And this is a well particularly demand side policies And an EU cBam may be necessary to improve the political acceptability of ambitious climate policy within EU And to support high carbon price And as such it could be absolutely crucial element In enabling EU to achieve its 2050 target And last but not least a well-designed EU cBam could incentivize trade partners to implement more ambitious climate policies And this could actually remove the need for an EU cBam And this is where I finish and I would like to invite all my co-authors to join On a quick q&a session. So if you please switch on your cameras And enable your microphones indeed So we we've asked the the research team who authored the report to join us for this session this q&a session And I would urge people in the audience to Ask questions in this session, but also in other sessions using the facility in the chat We've had a number of questions in advance, but also some during the event So I'm going to just try and I think we've probably got time for a couple of quick questions And the first one I wanted to bring out was a question to her gay on the legality question so One audience member asked what is the most time efficient procedure to achieve robust legal certainty on the wto compatibility of a cBam What is the most time efficient? Well, the issue is that it depends on what you mean what you mean by certainty I guess that in order to achieve certainty you need to go through the wto litigation and in order to go through the wto litigation You need to go all the way It's difficult because there is a problem with the upper body at this at present so it's Even let's put it in simple The most efficient approach to achieve legal certainty under the present law is It's not efficient. The other way would simply be to adopt A double treaty that includes common common pricing, but that is unrealistic Thank you. Okay Josek, we've also had a number of questions around should we say the the Europe to near neighbors So questions around the implications on the western Balkans on the countries of the eastern partnership Which could be places like Armenia and Azerbaijan Do you have any specific thoughts about How Those countries might want to you know the implications of of this proposal for those countries Well, I think It is indeed a very pertinent example that we bring up also in the report because of course they are very dependent on the Having access to the single market and the basic materials Tend to be one of the first things as these economies want to export to the single market because they are very competitive at it They basically have a choice And I think the ukraine example is very telling Because if you look at the ukraine eo dc fta It was actually stipulated that ukraine needed to adopt something that looked very much like an eo ETS And therefore they have either the choice to actually to seek different markets or like ukraine have done Adapter the realities of the single market and hope that the c-band measures will display enough of regional competitors competitors like for example like Russia And to try to take over their market shares and that's a commercial decision And that we are very crude about actually in this report But this is sometimes what a political economy of these major materials come down to in the end And a version of that question to hector and and benza from from kambit econometrics So we've done modeling about the economic impact could does it Does the modeling give specific details in terms of the implications for particular countries and again They're kind of that's that raised with regard to the western Balkans But i'm sure others in the audience might be interested In in the perspective about whether it gives insights into the outcomes for other countries Yeah Indeed and in the report, it's in the presentation It was quite summarized just for the for the slides and with the time available And there is a bit more detail in the report and there are member state level results underpinning All of this now it vary the results vary by member state mainly depending on the relatively importance of the sectoral shares within the member countries But there are a few other factors as well But generally if you break it down to sectors you start to get quite a good picture of what's going on Excellent and then a final one back to okay So do you think the fact that the c-bam proposal for sees that the revenues from a proposed c-bam will go to the EU general budget and not only be used to bring the economy would be a problem for its WJ compatibility so if you if you mean the fact that I mean the The aspect of the micro econometric analysis was how you use the money How you use the money of the certificate So the question is Would that be a problem from the perspective of your DL law or from perspective of international? Well, there may be an issue from perspective international on on qualifying the c-bam So the EU would like to in a litigation proceeding. They would like to Qualify it as a tax because that would have certain advantages And the use of the revenues could have an impact on the purification of the measure But it very much depends on the on this and that's a problem with though I mean it very much depends on specificities and on the on the a specific Way in which I disallocated but macroeconomically an actor and and sana were saying that Earlier, I think it's it's out of the crucial One final question for you all. I think this is the question that you might A number of you may want to weigh in on Is that so there was a question about the fact that in the report we've talked about different venues for In terms of presenting alternatives to see them we talked about venues where Greater multi-lateral action or bilateral action could take place But the question was what kind of policies would we see adopted within those venues? What what kind of things would have the most impact? And I think that's probably a little bit beyond the scope of what we looked at But I just open to any of the any of the team giving your thoughts like is it is about disclosure is about product standards What what would you see as being good common policies that could be adopted sana? Did you have any perspective on that? Well, obviously, um, there is quite a lot more discussion about this in the report Although it's not the main focus of the report. Um, I think like from a purely personal Perspective, I would say that we would really need to look at the finer detail of how these alternatives could be implemented Some of them sound great on the paper, but whether they could actually be practically implemented Um, I think one of the um conclusions from the seps event on Or last friday was that climate clubs are a great idea But we just don't have the time In our hands to wait until we can get those clubs together um, so in that sense in Unilaterally imposed c-bams might be the way to get started Yeah, perhaps very quickly. I think it's something that we should probably Think more closely about this policy mixes. I mean the the steven has been mainly understood and assessed as a measure of itself, but It's very important to see it within a set of policies and one trade related policy, which is very important straight these public procurement It's very big. I mean we we mentioned that in passing but we didn't enter into the discussion That is a very powerful tool that for which there is a lot of space in international Great. Thank you. And thank you all for your time and energy and uh, thank you for your work on the report I'm afraid we're going to have to move on just to bring in some other voices But we we're getting a flood of questions at this point But some of which we might try and pick up bilaterally, but we'll also see if we can come back to them in further Q&A sessions But I'd like to ask I'd like to move on to to take some reflections from an EU member state and a third country Representative So I'm very pleased that we should be able to be joined by Pierre to Jeremy who is advisor in charge of heavy industries energy and sector economy to the minister in charge of industry in in france Pierre I know we we were hearing you earlier, but we were having some video problems, but hopefully we can Have people here you're able to Certainly we can hear you, but maybe if I could ask you to share your thoughts on this at least we've got the slide that we can use Well, thank you very much for this for this opportunity to to discuss cbam and it's uh, and this role as a key driver for climate action from uh The modest perspective of an EU member states and first of all, let me thank Cisl and all the attendants to this event for taking time to discuss this crucial issue of How we can best address Collectively carbon leakage How we can best design a carbon border adjustment mechanism in the general framework of the proposal set up by the commission and how it does articulate with a world within a world where an open and Level level playing field based Free trade is here to stay So as you know more than five years ago In Paris since I'm Talking to you about the phone Well leaders agreed to make significant efforts to limit global warming well below two degrees by the end of the century And to achieve this common goal of the Paris agreement France and all EU member states and many other countries have endorsed an objective of climate neutrality by mid-century And as you know Oh several developments in Europe and other world recently given Enhanced hope that together we can collectively address this global challenge in an even more meaningful way and In this context the the european union has increased last september to 55 its target of net greenhouse gas emissions for 2030 Compared to 1990 levels Which gives a very strong positive signal and we believe that The renewed US climate ambitions and generally speaking The increased commitments by key global trade partners Are very promising steps in the context of the upcoming cup 26 in Glasgow So as you know, France has a very long-standing commitment to decarbonize its economy and and to reaching carbon neutrality Nonetheless over the past years greenhouse gas emissions have been declining steadily But we must speed up the dynamic and furthermore While emissions have decreased in France by around 40 percent since 1990 Our carbon footprint has risen by 17 percent. So this means the carbon leakage Is a very massive and undeniable issue Which challenges both the environmental credibility, but also the political and social sustainability of the transition This is why France as a located is a very significant share of its stimulus plan to the greening of our economy And this is an effort that we strive to Extend within the framework of the france 2030 plan announced by the president macron on october 12th With the idea to considerably speed up the low carbon transition of the economy And almost one third of the 100 billion of the stimulus plan are devoted to energy efficiency building innovation decarbonized transports low carbon energy And this is for us a very important focus of our economic policy policy mix in parallel The european union has strengthened its Its package of climate policies to deliver its new objective for 2030 once again in a very fully encompassing policy mix and this entails much welcome strengthening of the carbon pricing policy via A revision of the egs directive, which now will cover almost half of the eues greenhouse gas emissions It also includes Through a parameter adjustment and implicit drive to Push forward the carbon price and we've seen that the expectations by market actors have generally speaking matched What was in the uh, EU commissions? um in the european commissions impact assessment because the impact assessment says Generally speaking your price between 45 and 55 euros per ton We've possibly uh scenarios where it could go to 85 by the end of the decade And we've generally hovered in this in this Levels since the past few months. So this means that it's meeting its goals and that market operators are already pricing and the impact of this revision So to date the european union is one of the very few economies around the world that has a price level that is In line with the ambitions of the Paris agreements But more than three quarters of global emissions do not face any form of carbon pricing So this remains an unsustainable situation Both on an environmental point of view that's also from a social acceptance point of view and from a It's it's basically a matter of equity And to be very clear As we strengthen our climate commitments. We also need to address much more carbon leakage, which is very likely to attempt to intensify as uh, as the spread between uh, the most uh, the countries that have that are most Focused on addressing global warming and those that choose not to use a carbon pricing instruments is uh, is going to intensify And this has a very important consequence It is that so far the existing EU instruments to tackle carbon leakage such as three other ones is in the ETS system Are obviously crucial to maintain a level playing field But they fall short when it comes to addressing the issue by providing incentives to implement the new 2030 net emissions production targets So as a consequence, we need to implement more effective instruments that have a better Pass through to the end consumer and that incentivize better investments in deep decarbonization of key sectors And this is in our view The main point of the carbon border adjustment mechanism It does change the rules in the market in the market inside the EU It does in the end Give a very significant competitiveness edge to those producers within the EU that have Make that made to the choice of reducing their emissions because it's um, it allows them to capture part of The green premium though the additional value from producing your low carbon products When they're selling it within the EU and and this is for us a fundamental part as it has building a deep decarbonization strategy that shares evenly the burden between industrials in within the EU and consumers and the taxpayer and this is for us the key point of Sibam It is not the only Properly interesting property of Sibam Another point is that Sibam is and should be designed In full compatibility with the WTO rules and it is our belief that The position settled by the European Commission is indeed fully compatible with the WTO Legal texts and it is in that regard A very fair device because it will be implemented in a transparent and coordinated manner without trading partners Without any form of discrimination between domestic and foreign producers And this is something that we look forward to maintaining within the upcoming discussions on the Sibam test Nonetheless, we should also embrace this Yeah, if I can have just one more minute We can we need also to We need also to embrace the fact that Sibam will also be a tool to incentivize our trade partners to address climate change and set their own pricing mechanisms And this is probably the second very important property of Sibam. It is that it is some kind of a Montendu it is it is a way of Sending a positive reinforcement to our trade partners and to help them Get up in their climate commitment So thanks Thank you for that very thorough and very clear overview in terms of all the position of France and the Its support for this this approach Perhaps I could about our next Reflection, which is from a third country representative Katrina Rourke vice president of policy at the climate leadership council so protected from American business community Point of view and somebody who's worked a lot on these these kind of issues Katrina over to you Thank you so much Elliott. I want to I want to thank the CSIL team and Microsoft for hosting this event And I want to commend the report authors This is the most extraordinarily important climate policy issue We're facing right now this this junction between domestic climate policies and trade And the the layered analysis in this report is a terrific contribution to the literature So I just want to commend you and and say thank you for enhancing the conversation so much um Some some reflections. So one is is just a reminder that it maybe we only have on paper so far the euc bam But without a doubt We are we are moving as a global community to connecting Climate policy and trade policy So the the c-bam is is in the fit for 55 package as Sana was remarking We'll see how it evolves over time, but but the european union is moving on this We have also heard officials in the governments of canada, japan the uk and the us Suggest that a border carbon adjustment Is an important part of climate policy and they are looking for options to to integrate this And and maybe we'll judge how serious each of these countries May be but together that forms more than half of the global economy Which means it is not a question of of whether we're going to introduce On a broad scale instruments like a c-bam or a border carbon adjustment It is a question of what those instruments will look like And how our partnerships will evolve over time And it's because connecting climate and trade is absolutely indispensable to reaching long term decarbonization Targets as their report reflects that you will not meet its 2050 decarbonization goals in the absence of a c-bam Connecting climate and trade is imperative Uh, I really appreciated What the previous speaker pierce jeremy said about um france having 17 higher emissions right because what will climate policy has traditionally done is address production emissions within an economy But not consumption emissions and those emissions are embedded in global trade and have been overseas in jurisdictions that often have No carbon prices or restrictive carbon policies. Um whatsoever Especially in comparison to their destinations. So it's it's really it's really important that we ask the question Is it possible to reach a decarbonized future without instruments like c-bam or a border adjustment? Being adopted by the most ambitious countries. Um, and I think I think the answer is no One more one more reflection on on the report and then I'll turn to the the united states circumstances. So One of the terrific findings that you have uh here in this report that we have found in our own research at the climate leadership council Is this concept of a green premium or a carbon advantage? So by introducing this mechanism of a border adjustment you create commercial opportunity for the cleanest producers in the space And and that means you can Uh increased investment Even in very carbon intensive sectors in low carbon jurisdictions like the you like the united states Drive more manufacturing create more jobs and it is perfectly consistent with long-term global decarbonization and decarbonization of supply chains. So, uh climate ambition is now tied to commercial success And this is turning climate diplomacy on its head So far the conversation uh at the unf triple c Has always been This this perception that we need every country to move together So that nobody risks Losing market share losing economic growth because their climate policies are more ambitious than their partners And now we have evidence that with the right kinds of policies policies that include An element that addresses the emissions and trade The most ambitious policies can create more economic success at home Even in industries that are very emissive And I think that is absolutely terrific news and can be and can be a game changer on the international stage So, uh briefly the the u.s. Landscape um in his campaign platform president biden talked about some form of a of a border carbon adjustment in the united states This um this carbon advantage green premium this this concept that we have At home in the united states very carbon efficient market actors who could benefit from some element of pricing overseas emissions That that thread has been picked up by Everybody from our sort of most ambitious climate champion senator sheldon white house to one of the largest skeptics of climate policy In in the house of representatives the minority whip steve's gullies and getting these two folks on the same page About a good news story on climate I have to say how that happened before and shows the opportunity to build new political coalitions Around policies that that integrate a climate action and our trade interests On that that sort of fight against the existing roles in international trade that can preference The lowest carbon I'm sorry the the lowest cost but highest carbon producers over those producers That are going the extra mile to reduce their emissions. So this is a terrific political opportunity to sort of set this stage in the us for for renewed interest in doing Something related to to climate ambition, which is Of course imperative to to global ambition and and And then I'll talk briefly there's um in in almost all of the the climate policy Legislative instruments that have been introduced in congress We have seen some element of a border carbon adjustment But recently we saw senator chris coons and representative scott peters Introduced a standalone border adjustment policy So tabulate the regulatory costs to industry and use that as the basis of a border adjustment and I know that Very many people may have seen this policy instrument come out in the wake of the c-bam In the midst of this conflict over section 232 tariffs and think this is some form Of a retaliation, but I am I am here to share a different perspective Which is that what the us is looking for is a starting place for this conversation Especially in advance of cop. So senator coons will be leading a delegation Over to cop and and he wants something to talk about And he wants to talk about a climate policy success opportunity and that is in connecting climate entry so What we have here is now an opportunity At the cop to talk about this idea that high ambition equals economic prosperity at home and Have a basis for the eu and the us To have a sort of like a troubleshooting conversation How can we Work together to address the emissions associated with traded goods? How can we address some Some technical challenges like measuring the emissions intensity of traded goods? How can we start a conversation? Because we know this instrument is inevitable connecting climate and trade is inevitable So how can we start the conversation to make sure that these instruments are as successful as possible? And I totally agree With sana that we cannot wait for For a climate club or a carbon club But these unilateral instruments form the basis of the conversation that will let us advance the ball into the future Thank you very much Katrina, thank you. That's that's been really helpful. I'm really illuminating and great to get that Parallel perspective from the us context And thank you for your kind words as well So i'm now pleased to invite our distinguished panel of different perspectives who will be able to reflect On the content of our report reflect on this issue Um, so I should invite to join me on screen. We should have uh, well thomas hornfeld from Who is vice president for sustainability in public affairs at ssab? Susan dr. Susan drager Senior fellow at the german institute for international and security affairs um We have dr. alberta arribas from uh, microsoft sustainability expert science league in europe from microsoft and of course anton columbani From the cabinet from uh, vice president executive vice president france timmins who Obviously has been responsible for leading the work on this Um, thank you all for joining me. Um, I'm gonna Ask you all to kind of just maybe quickly open up by just letting me letting us have some initial Reflections on the conversation so far and on the report and then we have some specific questions that we will Put to you all Um, including sort of other questions that will be coming in as as we go But maybe i could start with you anton. Um, just great to hear your thoughts on on the report and some of the issues that have been Already raised so far Yeah, thanks a lot. Thanks to you and thanks for organizing this very interesting event Um, maybe i'll start by by recapping a bit what we what we're trying to do with the the c-bam. So obviously we want to Limit the rising temperature to 1.5 degrees and to do that Um, we have committed that europe will become climate neutral by 2050 And you know as well that the milestone in this journey is the reduction by 55 percent Affirmations by 2030 Um, and I want to to stress that these targets are now legal obligations for the eu These are enshrined in the eu climate law and it's First and foremost to to comply with these obligations that the commission has proposed its comprehensive legislative package last july Of which the c-bam is a is a part also with the reform of the ets and other pieces of legislation Um, obviously uh to to mitigate climate change. We need to act at a global level and and Commission are fully mobilized For the cop which will take place in a in a few days Apologies anton. We're we're getting a bit stop start with you So i'm going to go to susan next and then maybe when i'll then Yeah, maybe go around the panel and come back to you susan. I just wanted to get your thoughts on Okay, it'll be international acceptability of some of these proposals um, you know, particularly so we've obviously put up with some thinking forward, but maybe you might have a sense of Whether some of the alternatives might be more palatable and and what what? How this conversation might be landing internationally over to you Yeah, thanks alia. I wonder whether we are talking about alternatives here or whether it's rather about confidence Um, in the reports are several ideas Reflected and they are all valid ideas. So they are not as such Things that I wouldn't sign up to Basically a big role for the WTO or OECD For forums to discuss what countries could align their interests Um, but I think we have to keep in mind that there are different timelines in which we discover these alternatives or a complementary approaches First and foremost, I think um, it needs to be understood that even the sebum is just proposed at this moment It even if it started in 2023 on the first of january, that will still be two years before it will enter a phase where there will be some cash Being paid and it's not being paid by the exporting Agents but rather by the importers So this needs to be kept in mind and it's it's a cost burden basically on consumers within the EU And also, of course, this relates to discussion we had before How to handle this cost increase and how that all impacts the modeling and so on so forth But that's not the point. The point is that from 2026 onwards We will definitely have something to talk about also when it comes to retaliation because you cannot Retaliate against anything that does not Demand countries to pay I still it's it's the regulation that asks the importers to start Registration of the imports very early on and to attach a number of embedded carbon to the imported goods that are listed in the proposal. So The alternatives that are mentioned is to move forward in preferential trade agreements to move forward at the WTO level In discussing common interests on common clubs, which is a difficult framing I guess because we have clubs already all over the place g7 being one I mean the g7 has really a good phase at the moment very positive and it comes to aligning the interest and supporting the cop 26 and um, so I would like to To address that Your report is very good in naming the alternatives But I think it needs a little add-on and how this could fly In which time or on which time horizon we are projecting this We have a geopolitical issue with the wto There is not much support on reforming it So any clauses that need a need agreement will not materialize anytime soon And all the proposals with the forums and the talks and the registries are very important because they work their way around this pocket And I think that's why we need them to and the cbam is just giving impetus and it's giving momentum To addressing these issues that are overdue Is it's about finding common ground with trade partners on how to measure a carbon content How to handle specific industries the EU would like to city carbonize as soon as possible And the US does But then a lack of regulatory Yeah harmonization or synchronization is is just in the way of building For instance the carbon pricing club, right? So, um, I would I would see Most of the proposals made here as important forums in which these things can be addressed And the role of the cbam is really to to push for some more clarity and cooperative spirit in this respect We will have difficulties in selling a cbam to countries that are poor that are Feeling affected due to their export shares to the EU That's basically not or there's won't be those that make a big difference in carbon emissions. And I think addressing This this kind of what we discuss the common but differentiated responsibilities issues and exemptions That is something that needs to be brought forward and it could because that is There is basically also understood in the trade regime and in bilateral trade relations that the EU has with poorer countries So I stop here and probably can go Further in the discussion. Thank you Absolutely Alberto just just moving to you. I mean, I wonder what your thoughts are Suzanne very clearly set out, you know, the the role of the cbam is sort of pushing Further action. What do you see some of the potential outcomes? From the perspective of a company that's involved that's obviously present in an awful lot of countries So, you know, you have an interest both in supporting climate action, but also in supporting good international Accordance and and trade flows Yeah, no, thank you very much Elliott and Before I go into answering the question congratulations to you on the whole team on the report because I have I have thoroughly enjoyed reading it And I think it's a very important very important contribution to this to this debate So as we have been discussing today, it's still the first step in a very long journey So it's it's difficult to kind of forecast exactly how how things are going to develop But I think that we can we can already say a few a few things And the first one is that we expect that there will be an increased kind of need and demand For kind of common definitions and standards around embodied carbon because something that the cbam is doing that is very very clear Is putting the spotlight into embodied carbon which has been in many ways kind of the A little bit forgotten when when we have been talking about carbon emissions so far In preference of kind of emissions coming from from energy consumption So that's that's going to be a very interesting development that need for these kind of common definitions and standards The second one, of course is as you have just mentioned cbam is going to affect many countries inside and outside Europe And this is going to drive a need as well for Essentially being able to have interoperability between measurements and Kind of accounting and again, this is going to be something in which technology will play a very important role So we expect to to be able to help in this space But it goes beyond technology to be able to create these kind of tools and platforms that enable the whole interoperability The final thing that this is clear to me is that what we should expect We we can expect that there are going to be changes resulting from conversations with all of our trading friends and partners in the european union and the conversations inside the european union And what this is going to trigger is a need to essentially accelerate kind of a A faster loop integrating changes across the science technology and policy making interfaces Because we all want actually to be able to kind of integrate the best experiences and To bring kind of lessons learned as soon as possible. And again, we expect that there will be a role for technology in that in the particular space Excellent. Thank you, Alberto. I'm going to move to you. Thomas. Um, obviously You're represented from the steel industry. The steel industry is very heavily discussed in relation to to these topics It would be great for you to share your thinking in terms of the industry's perspective Um, and I guess if I particularly put it on the spot, you know, one of the key questions is this If you could explain a little bit about some of the issues around exporting steel and the phasing out of real answers In relation to the cbam You know, this is something that's discussed a lot. It'd be great to hear your kind of your inside view on From within the steel industry and on what that issue is about and how it needs to evolve Thank you. Um I think the the starting point should be that we have a relatively Cu2 efficient steel industry in europe. We are Emitting less cu2 in our steelmaking operations than the other parts of the world Uh, and the industry is the transition phase right now and it is important That we continue that transition. I think most european Steel companies do have a roadmap for getting rid of their Emissions and if and when the free allowance is which is the carbon leakage mechanism that we have today Is being phased out then certainly cbam could be something to to look into it's an interesting concept As always the devil is in the detail. We've been working on the details of the euts trading scheme that we have today for for tens of years And when it comes to the cbam, we need to be as careful with the implementation, I think The cbam mechanism, which means that the Imported steel would carry the same kind of carbon costs as european steel makers do Would certainly create a level playing field inside europe among the steel makers That is certainly at least theoretically true. There are some details about, you know, Manufacturing fruit and so on but let's let's not go into that As Susanne was saying earlier at the same time It will increase the cost for consumers in the eut. We are Racing the cost of steel in the eut. That is what is going to happen when we attach price tag both to imported steel and A domestic eut production for carbon emissions And I have nothing against that. I think I mean we need to incentivize the decarbonization So that that's fine. The important thing here is the level playing field The thing is that when we are exporting out of europe we do not longer have A level playing field because the european steel makers still have the carbon costs related to the euts Our global competitors in their respective home markets or in the global market do not have the same cost and and that that would then Put european steel makers at a competitive disadvantage, which would Mean that we would then increase the steel production elsewhere in the world Which would have a negative effect on reducing ce2 emissions in the world I think that is something that we need to To to realize And furthermore, we also need to to realize that the customers of the european steel industry Let's let's take a european truck maker as an example That truck maker would then face higher steel costs that are higher than outside the eut Which would put these this truck maker at a competitive disadvantage Compared to imported trucks But also compared to the global truck market when exporting out of the eut And this could then Lead to another risk with this which is circumvention that this truck maker instead of welding his truck chassis in the eut Would buy Steel outside the eut weld the chassis outside the eut and then import the chassis instead of importing the steel Which would then again have a negative effect on the decarbonization globally One way of Avoiding this that sometimes is being mentioned is to have some kind of ce2 v at value added ce2 tax that this Carbon cost follows the Manufacturing change of the supply chain so that it then can be calculated and reversed When exporting out of the eut. I know that this is technically complicated But if you really want to Incent device and get a level playing field both inside and outside europe We need to take the issue with Global competitive nevertheless both for the steel industry and its customers into account Thank you, thomas. I'm now going to try and bring anton back Maybe we might do by sound and not by audio just to make sure we can we can Hear everything and I'm not quite sure Exactly because it was a bit stop start exactly where where we lost you but And to on any sort of final remarks that you had in terms of your introductory reflections But also I think we had a few other questions that have been put to you so Noting for example, but our analysis and the report is slightly different to The commission's impact assessment so in terms of the the carbon savings So any any thoughts on that and I guess that's a thought for our modeling team as well But also this question about I think it's a it's a perennial in terms of the question list What does it mean for exporting industries? You've just heard heard a little bit from thomas bringing that to life So just great. Thank you, anton Yes, thank you and apologies for the connection issues. I hope you can hear me well now No, I just wanted to To emphasize that the the sea bomb is is so to speak the the companion to The extra climate ambition of the EU and the increased the carbonization Efforts that we need Over the coming decade in the in the sectors which are covered Because whatever happens we need To to have effective protection against carbon leakage and Otherwise it's it's it's self-defeating. I mean to to reduce emissions in the EU While this leads to increased emissions outside the EU Because the the purpose is to address climate change, of course And the current issue with the instrument that we have because we have an instrument to to tackle carbon leakage Is that the This instrument of real allowances under the ETS also Dumpens the incentives to decarbonize in those sectors So this is why we we see the sea bomb as an important component of the The package which is a coherent and comprehensive package. We have put on the table last July Just a few a few thoughts on a couple of points on the on the export side Well the justification reason why we have A few allowances at present is to avoid carbon leakage which is Linked to the EU ETS the fact that we have a carbon price inside the EU And basically once you have a sea bomb the justification for this disappears. So eventually the two have to Well one has to replace the other the sea bomb has to replace free allocation What we have conceived is a is a transitional period Because this cannot happen From one day to the next and we do this in a way that is also non discriminatory And where there's no global protection so to speak Then on on exports I mean there is out there this request from Parts of industry to have something akin to an export rebate However, we know that this type of measure Would would be very controversial In terms of compatibility with wto And there would be a risk also of retaliation in in such a case And as for the impact on the value chain There is A provision to avoid circumvention In our proposal. So we we have foreseen a provision against a convention Obviously, the impact of value on value change is also something we have assessed in the impact assessment Our conclusion is that it is overall quite expected to be quite moderate Nevertheless, it will have to be continuously assessed As we implement the sea bomb and the sea bomb is also conceived By design as an as an instrument which can be extended in the future You will have a first review In the in the proposal. It's in 2025 where we will examine Potentially the coverage of indirect emissions and potentially covering other products as well And so we are starting with A number of specific products But the issue of impact on value chains could be tackled further down the line as well I will not go much into, you know, what what accounts for the differences between the two impact assessments But what I what I can say is that our Analysis is that sea bomb is Is a measure that basically contributes to a reduction of co2 emissions Uh, both abroad and in the EU And uh, it is therefore a measure which is a Justified as a climate policy measure not to trade policy measure or a competitiveness measure It's really a measure which which is part of a policy mix. I would say to achieve Our more ambitious climate target for 2030 and beyond to achieve the climate Objective. Thank you very much Thank you. I think I understand that you have to to leave us now. So I'm going to Put my last few questions to the other panel members Um, I have a I have a set of questions So we're having quite a good mix of questions around carbon footprinting um carbon accounting sort of Tracing carbon through the supply chain and I think maybe thomas and alberta Be interesting to hear either of your thoughts on that. So, you know, this is a this is an area where we are sort of Seeing more and more interest. How do you how do you label? Have you kind of track the carbon through the supply chain? um, because it seems it's important for See if I'm designing and implementation, but it's largely important for other policy mechanisms as well And alberta, maybe if I could start with you Yeah, thank you earlier Yeah, so I think this is a critical issue because until now we have had relatively simplistic ways of doing the calculations of embodied carbon Simply just taking essentially a A amount of a material the of a material are multiplying it for a by a carbon factor And we have to keep in mind that if we use kind of the same uniform global kind of Carbon factor constant We are going to get exactly the same The same result and that's going to hide kind of very important regional or local variations An example here can be a steel producer that puts a lot of effort into reducing their emissions and reduce them by 90 But if in the way that I do the accounting I'm still using the same kind of global uniform constant to calculate the total emissions I will not see any of those changes coming into into my accounting And that means that we really need to start just kind of having accounting methods that are able to use things like Internet of things and new sensors and real-time measurement So we can bring these local variations that are updated in real time So we have a proper measurement of what is the the kind of the cost from a carbon emissions point of view Of the generation of any material without that Essentially, we we are lacking one of the most effective kind of incentive measurements towards producers to really be able to do the right thing and produce their carbon emissions Excellent. Thank you. I'll better Thomas. I mean a similar question to you, you know, what do you see particularly given That cbam is is targeted is aiming to affect The industries that are most described as energy intensive Do you see particular ways of standardizing reporting around the carbon content of Of the products of those energy intensive industries Um, it would be nice if we could let's put let me put it that way I think it is very complex and what we shouldn't do is to use simplified mechanisms here. There is a significant difference In cb2 intensity among steel makers already today And it's going to be worse or rather better in the future because a lot of european steam makers are going to decarbonize a lot faster Than their global competitors There are I think the best instrument that we have today are environmental product declarations and those kind of things But even if they are a standardized Uh, uh Protocol standardized Way of showing your emissions. There are so many Pre-conditions that you can define yourselves that they are actually hard to combine Um, I guess that some of us are aware of the eu initiative pep the product environmental footprint Which would be if properly standardized the way also of helping people making the right decision and Potentially track embodied carbon throughout the value chain and Let me just say that it's probably a dream scenario, but if we could track Carbon emissions or or embedded carbon throughout the value chain all the way to the consumer Then we could potentially uh, susan talked a little about Tax c2 emissions at the consumer instead of the producer and then we wouldn't need a c-band Then we wouldn't need Other types of emission costs because then everybody competing in the european Uh consumer market would face the same type of emission costs and the safe Some time of incentive to decarbonize regardless of whether you're based inside or outside europe Uh, and and that would be a very elegant model, but I guess I would have to wait a few years before that is implemented Thanks Thomas susan and your name is just just brought up so From the international perspective, so a lot of the questions we're getting on for a significant number of the questions we're getting for around the impact on of On this conversation of brexit and vice versa so For example, will Would is there a likelihood that the brexit process could delay the implementation of c-band and equivalently is there a likelihood that? Having the c-band happen will affect the the uk's ability to Deliver some of its own climate goals. So, you know, it's obviously it's a near neighbor. It's a big economy I wonder what your thought is on that usually I trust that the both parties are interested you and uk in Bringing forward their common interests in climate policy and that um due to the Well, not so nice negotiations on on the brexit There has been a kind of yeah Well, I try to be diplomatic. So I think that um The the interest is on both ends not to block each other when it comes to climate policy making and the c-band proposal actually is Is very explicit on how it would like to handle the situation And that it would like to see a linking of the egs between uk and the eo and That would like to build on this, of course We will see during the next few months of discussion whether we'll stick to that from the eo part Or whether the uk will will immediately answer whether c-band that should be recognized in a in a way that in makes sense for both and um So, yeah, it's it's subject to this overall situation that the The political climate is not so friendly when it comes to the trade related Agreements between the two parties Then again looking at the cop and looking at the role of uk in the world when it comes to climate uk was always pushing and pulling towards the eo and I have I really trust that this will go away this longer longer Longer term stands. Um, it very much depends on the governments in place And we'll see what's going to happen with the new german government also in this respect so, um Well, I'm rather not so skeptical on this. It's it's a lot of noise, but I think technically it's it's on a good way I'm building on this question of international relations so we've had a question around the The african continental free trade area And kind of the implications of the c-band proposal for that And I connected to that there's a there's a kind of question I think you could probably extend to any developing country with a significant trade relationship with europe is You know, what would be the the value or the benefit of having and support to enable Corporates and and you know parts of the supply chain to to become more compliant with the c-band in in developing No, I said before that I think it is very advisable to to find a way to Exempt those countries that I really have a very small share of Covenant they deliver to the EU and if there is a higher share There should be a solution that meets cooperation and helping on a technological end At the moment the proposal is very watertight when it comes to the wq principles for good reasons That means there's there's no exemptions included at the moment um although Exemptions are compatible with the wq o situation although again this needs to be this Negotiate negotiated on a separate track, which makes a lot of work So so in principle we we can We can reach over to the poor countries either as part of their trade relations what we have established as EU with them or Speaking technically we could in bird in the proposal a de minimis clause that makes them exempt by Automatically because they are not playing a major role in these five sectors We know cases where there is a high dependence on EU On delivery to EU markets and I think Go any further we can go any further if we're not addressing them With these countries militarily Mozambique is a well-known example for aluminum deliveries to the EU So it will be tedious. It will be a subject to things the external action service and the EU commissioners such need to address I think it's too early to to move forward on this At the core I expect a lot of Questions in this regard the EU will have to address this question and will try to make some offers at least Well, not as a lip service, but at least signal that it is open to adjustments here That's great for my last couple of questions. I wanted to bring Pierre and Katrina back in if that's okay um, so just just briefly Yeah, hopefully you've been able to follow this conversation I'm just you know, you very clearly set out the benefits the economic benefits the kind of the climate benefits of this proposal And in this conversation, there's been quite a lot of engagement with some of the More indirect kind of economic challenges so the risk of circumnevigation the risk of challenges to export markets What's can I ask what's your sort of thought thinking in response to some of those challenges? Thanks, so I I I guess my thinking boils down to um We need to start the conversation so we can we can tackle those challenges A very many of these concerns are already built into trade law in the united states We have really strict rules about clarifying country of origin, for example And so we can rely on what we already know how to do in the trade system But what we don't have in the trade system yet is this ability to Track emissions where they happen and associate them with individual goods So we we need to have an international conversation About the correct ways of doing that in in my view You know, the united states should set the rules so that they benefit us actors But we certainly need to have a conversation about how to make those rules Fair and clear and enforceable in in jurisdictions that impose something like a border adjustment And and clarify How we deal with gaps in in reporting and information about about co2 emissions associated with products. So Yeah, we just have to have a conversation at the at the multilateral level to tackle these challenges So that we can build on what we already know how to do in the trade system Thank you. Katrina. That was great. Yeah. Are you are you with us? So apparently you're connected, but we're not hearing you So I'm unfortunately, I would I would get to you for a final answer But it doesn't sound like it's possible. Um instead. Can I can I go to you alberto? So Microsoft you've been supporting a wide range of of climate conversations and activities We're obviously just about to we are days away from cop26 We've just kind of engaged with An in-depth detail the exploration of the relationship between climate and trade Particularly we were about to see bams. What are some of what would you hope to see? That could make me move this conversation forward as we as we go into that big international Yeah, I think it comes back to to the point that Katrina was just mentioning again Just just now in terms of being able to really do the the measuring and the accounting and the traceability better that we are able to do this now and I one of the reasons that we are engaged across all these conversations is because we really believe that technology has a very important role to play In this space to really enable that traceability and really improve the development of these kind of measuring and accounting systems So this is something that we really really want to help and and we won't Do it happening because in the absence of these kind of measuring and accounting and systems that can facilitate interoperability The whole conversation is very difficult. So we really hope that by kind of doing the groundwork to facilitate this We will end with better standards and better systems that enable them to have all of these Open conversations that bring everybody together for essentially the great goal, which is to reduce and eliminate the carbon emissions Everybody I'd like to thank every thank you Alberto for that great answer Which I think is it's going to be the last opportunity we're going to have for the q&a Thank you all for participating in all of your time and insights. That's been an incredibly helpful conversation um It just falls to me to to wrap up and sum up what has been a really fascinating event a really fascinating Set of conversations We set out with our report to to start a conversation obviously the conversation about cbams is definitely very much happening um, but to to give it a bit more uh detailed a bit more focused to provide some of the The insights that would help people talk in an informed manner and feels on the basis of today's conversation that we Have at least partially succeeded. So thank you all for that. Thank you all for the flow of questions that um has has come through We're very sorry. We haven't been able to deal with all of them or even most of them. I think we probably dipped in the in the in the very top of the pool of questions And we will see what we can do in terms of getting some responses back to some people So bear with us. There will be a recording available and we will share the presentation um Hopefully in the thank you email that all all the audience members should get and we'll make sure that that's available as well But um, do do have a look at the report and the detail do do keep engaging with us Share your thinking about how we should take some of this this research and analysis Um, and we will look forward to engaging with you in future events future activities But without too much other things to say. Thank you very much