Exporters Warn EU Carbon Border Levy Could Crowd Out Carbon Capture
COP 31 Side Events • United NationsNovember 13, 2026
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Exporting countries are trying to cut industrial emissions while also facing Europe's new carbon border charge. At a COP 31 side event on Nov. 13, 2026, panelists from Türkiye, Trinidad and Tobago, South Africa and Brazil said that charge could pull money away from the carbon capture projects it is meant to encourage. European and UK speakers pressed for rules that credit decarbonization abroad. No decisions were made, but the session showed where the next fight over carbon-border policy is forming.
- Brazil warns 160 Mt of CO2 is exposed to EU carbon border charges.
- Türkiye faces about $23 billion in CBAM-exposed trade under an incompatible new ETS.
- Bellona Europa: credit capture abroad, or CBAM "becomes a protectionist measure."
- UK CBAM planned for Jan. 1, 2027, with EU-UK ETS linkage expected.
- Network of about 13 countries seeks steady UN funding for Global South CCS.
Exporters Feel the Squeeze
The basics: The EU's Carbon Border Adjustment Mechanism (CBAM) puts a carbon cost on certain imports. The goal is to stop "carbon leakage," the shift of emissions-heavy production to places without a carbon price. Carbon capture and storage (CCS) traps industrial CO2 and stores it underground.
Why it matters: The second panel ran about 50 minutes, the longest stretch of the event. Its message was blunt: developing exporters are being charged for carbon before they can afford to capture it. For workers and plant operators in steel and other heavy industries, the issue is a direct cost of selling into Europe.
Where things stand: Four panelists described very different starting points.
- Türkiye: Yavuz Aslan, an assistant professor, said the country has launched a new emissions trading system (ETS). He said it is not compatible with the EU's CBAM, leaving about $23 billion in trade exposed.
- Trinidad and Tobago: Rafi Hosein of the University of the West Indies described a storage atlas funded by the Green Climate Fund (GCF). The atlas maps where CO2 could be stored underground.
- South Africa: Zamaphondo Sibewu of the Council for Geoscience described a pilot project that stores CO2 by turning it into rock in basalt, a process called mineral carbonation. She tied the work to CBAM exposure in the country's steel sector.
The other side: Isabella Morbach, director and founder of CCS Brazil, gave the sharpest warning. She said 160 Mt of Brazil's CO2 is exposed to CBAM. She argued that a gap between carbon prices in Brazil and Europe could stall domestic CCS. Her concern is that money paid to the EU becomes money not spent on cutting emissions at home. If developing countries keep paying the EU, she said, "we will never implement CCS."
Morbach's point turns the usual logic of CBAM upside down. Supporters say the levy pushes exporters to decarbonize. Morbach argued it could drain the capital they would need to do so.
Decisions and stakeholder impacts: No votes were taken. The panelists described the following pressures:
- Exporters and industrial workers in Türkiye, South Africa and Brazil face new costs on EU-bound goods.
- Geoscience agencies and universities in Trinidad and Tobago and South Africa are doing early storage work, often with international funding.
- European policymakers face growing pressure to show that CBAM does not simply move money from poorer countries to richer ones.
What's next: The audience Q&A turned to storage, CO2 utilization, and MRV (measurement, reporting and verification) accounting. MRV is the technical system that would decide whether emissions cut abroad can count against a border charge.
Europe Asked to Credit Capture Abroad
Why it matters: How CBAM treats carbon captured outside Europe will decide whether foreign CCS projects pay off. Olivia Powis, CEO of the Carbon Capture and Storage Association (CCSA), cited a UK government calculation: without linking the UK and EU carbon markets, UK exports to the EU face about £7 billion in exposure.
Where things stand: Francesco Lombardo Sacchetti of Bellona Europa said CBAM has two aims: preventing carbon leakage and extending the carbon price beyond Europe's borders. He argued that emissions cuts from CCS abroad must be recognized.
"Otherwise, CBAM just becomes a protectionist measure," said Lombardo Sacchetti.
Powis described the UK's own CBAM. It is planned for Jan. 1, 2027, and covers five sectors. Whether oil refining should be included is still being debated. The CCSA also expects the EU and UK ETS systems to be linked. The panel touched on UK CCS projects as well.
The other side: The refining debate shows the trade-off. Including more sectors widens the levy's reach. It also widens the number of industries exposed to new costs.
Decisions and stakeholder impacts: This was an informational session with no decisions. Both groups are calling for more certainty on costs:
- UK manufacturers want ETS linkage to avoid the roughly £7 billion exposure.
- CCS developers abroad want credit for the emissions they capture.
- Refiners remain in limbo while the sector's coverage is debated.
What's next: The UK CBAM is scheduled to start Jan. 1, 2027.
A Network to Keep Projects Alive
Why it matters: One-time CCS grants to developing countries often stall once the money runs out. A new network aims to provide continuity as CBAM pressure grows.
Where things stand: Katherine Romanak of the University of Texas Gulf Coast Carbon Center described the NICE network. It is run by UT Austin and IEAGHG and links national centers of excellence in about 13 countries. The network aims to tap UN funding channels, including the GCF and the Climate Technology Centre and Network (CTCN).
Romanak pointed to peer mentoring as an example: Trinidad and Tobago is mentoring neighboring Guyana. In the Q&A, she stressed that countries need to assess their storage capacity and put regulation in place before projects can move forward.
Decisions and stakeholder impacts: No decisions were taken. The network's success depends on whether UN funds commit to long-term support rather than one-off grants. Universities and geoscience agencies in member countries would gain the most from steady funding.
What's next: The network plans to pursue GCF and CTCN funding. No timelines were given.
Minor Items
- Moderator: Tim Dixon, head of IEAGHG, chaired both panels.
Looking Ahead
The UK CBAM is set to take effect Jan. 1, 2027. Watch for progress on EU-UK carbon market linkage, the refining decision, and the MRV rules that will determine whether carbon captured abroad counts at the border.