Russian agencies mull creating alternative to EU's Carbon Border Adjustment Mechanism within BRICS

MOSCOW. April 22 (Interfax) - Russian government agencies are considering creating an alternative to the European Union's Carbon Border Adjustment Mechanism (CBAM) within the BRICS countries, a source familiar with the details of discussions on the subject told Interfax.

Within the context of discussions about the development of a low-carbon economy initiated by the Russian Union of Industrialists and Entrepreneurs (RSPP) ahead of its congress, the Industry and Trade Ministry said an alternative mechanism could offset the risks of restrictions on competition on world markets.

In order to create an alternative to CBAM within the BRICS, the ministry believes it is necessary to develop standardized approaches to calculating emissions and absorption of greenhouse gases, the requirements and system of criteria for classifying projects as climate projects, as well as the system for validating and verifying climate projects with the participation of experts from BRICS countries.

The ministry has not yet responded to questions from Interfax.

The CBAM is a mechanism developed by the EU that calls for importers of goods to pay a "carbon tax" equivalent to payments for greenhouse gas emissions by European producers of similar products. The CBAM is expected to solve the problem of carbon leakage, where production of carbon-intensive products is moved to countries with laxer regulation of greenhouse gas emissions, since producers inside and outside of the EU will be placed on a level playing field.

The EU will start imposing duties on imports of carbon-intensive products such as cement, iron and steel, aluminum, fertilizer, electricity and hydrogen in 2026.

Russian Economic Development Ministry officials have repeatedly said that the climate agenda and instruments such as the CBAM are become a means of protecting the European market from competition. Various Russian agencies have also repeatedly voiced doubts about the CBAM's compliance with World Trade Organization rules.