Australia to consider CBAM for cement producers

Imports of cement from countries such as India, China and Vietnam could face a tariff that will level the playing field for Australian producers now subject to cutting further carbon emissions under new rules.

New obligations and reporting requirements commenced on 1 July 2023 under the Safeguard Mechanism reforms which require high greenhouse gas emitters to keep below an emissions baseline limit.

Climate Change Minister Chris Bowen delivered a speech last week promising to undertake a review to see if Australia might impose a carbon border adjustment mechanism (CBAM) such as that in Europe which will commence on 1 October 2023. From 2026, key importers into the European Union will need to purchase certificates equivalent to the carbon price of their emissions trading scheme, according to the minister.

“The EU CBAM initially applies to imports in five emissions-intensive sectors deemed at greater risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, and electricity,” Bowen said.

The minister revealed his department will be undertaking the review with the help of academic expertise. The review will look at an assessment of the carbon leakage risks; development of policy options to address carbon leakage; and critically, an assessment of the feasibility of an Australian Carbon Border Adjustment Mechanism, particularly in relation to steel and cement, Bowen said.

As part of the review, there will be two rounds of public consultation which will include calls for written submissions. The team will engage with key stakeholders including industry, peak business groups, experts and researchers, state and federal government agencies, international bodies and overseas trading partners.

“Carbon leakage undermines national and international climate action,” Bowen said. “The impacts on the planet of failing to tackle emissions urgently are dire [and] we all have a role to play in this massive undertaking.”

The final report from the review will be finalised in Q3 2024.

Image: Adbri cement production.

About the author

Desi Corbett

Desi is our weekly news journalist and the editor of Concrete in Australia magazine for 10 years. She has been heavily involved in all forms of engineering since 2013; part of a 30-year writing career across a range of subjects and media.