AEGIS Europe supports the Joint Statement of the CBAM Sectors on the Intransparency of the CBAM Registry vs. ETS Registry

 AEGIS Europe supports the Joint Statement of the CBAM Sectors on the Intransparency of the CBAM Registry vs. ETS Registry

The public consultation on the draft Regulation on CBAM Registry offers the opportunity for a first reflection on the design and functioning of the electronic infrastructure required for the implementation of the instrument. While preserving the confidentiality of business sensitive information, a high degree of transparency of the CBAM Registry is indispensable for public scrutiny and input, which can lead to more robust and well-considered policies.

Against this background, the signatories of this paper would like to highlight their serious concerns about the expected level of intransparency of the CBAM Registry, especially when compared with the EU ETS Registry. This is due to combination of the provisions of the draft CBAM Registry Regulation as well as those of the basic CBAM Regulation 2023/956. According to the current CBAM legal framework (in particular article 21 of the draft CBAM Registry Regulation and article 14 of the basic CBAM Regulation 2023/956), de facto all information in the CBAM Registry will be deemed as confidential.

The Commission would publish only an annual report on total aggregated emissions by CBAM good. On the contrary, the EU ETS Registry Regulation 389/2013 (Annex IX) provides public access to most of the relevant information included in the registry, such as contact details of European installations as well as details on total emissions and free allocation for each installation.

This high level of transparency is linked to the explicit reference of recital 28 of the ETS Registry Regulation to Directive 2003/4/EC on public access to environmental information. Instead, no reference to the same legislation is included in the Draft CBAM Registry Regulation.

Against this background, the signatories urge EU institutions to revise the draft CBAM Registry Regulation as well as reviewing the relevant provisions of the basic CBAM Regulation in the context of the 2025 revision in order to ensure that the CBAM registry is as transparent as the EU ETS Registry. For instance, such consistency requires that contact details of CBAM declarants and third country operators as well as total emissions and total available CBAM certificates for each of them are made publicly accessible.

AEGIS Europe New Advocacy Campaign: Top 5 Priorities for #FairTradeNow

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In a fiercely competitive global market, Europe’s manufacturing sectors face growing pressure from unfair trade practices. Overcapacities in many sectors and in many countries, as well as imports that disregard EU environmental and social standards, create an uneven playing field, leaving European industries at a disadvantage.

The Draghi Report has highlighted the urgent need for a resilient and competitive European industry that aligns with Europe’s strategic interests. The Report highlighted the gaps in the EU’s current trade defence mechanisms that need to be addressed. We need flesh on the Draghi bones. Market performance indicators reveal a decline in competitiveness in 2023 compared to 2012. This is evident in reduced production across sectors such as steel, silicon, ferroalloys, aluminium, and paper & board.

Additionally, exports have dropped significantly in sectors like finished steel, man-made fibres, and paper & board. Increased energy prices also play a role, but the real problem is the dumping of excess capacities on the open EU market and the need for new approaches to deal with industrial subsidies in addressing these overcapacities. Fairness in access to public procurement markets and in the imports of procured goods into the EU should also be enhanced. For EU public procurement, this includes enforcing best value award criteria, fostering EU content and restricting participation and access to EU funds when it comes to foreign bidders with which the EU has no agreement on procurement.

We are losing manufacturing jobs at an alarming rate. In AEGIS Europe sectors alone, approximately 34,000 direct jobs have been lost compared to the pre-COVID period. Considering that each direct job loss triggers 3-4 indirect job losses, this amounts to around 100,000 total jobs lost. Since the 2008-2009 financial crisis, the situation has worsened, with 2.5 million industrial jobs disappearing and numerous plants across Europe shutting down.

A new wave of closures rolls out on the EU, mainly in the automotive sector and the energy intensive industries, but also in the green tech sector like batteries. These closures are situated in all parts of the EU. AEGIS Europe strongly believes that effective trade defence is needed to ensure the future of the EU manufacturing. Unfair trade must be stopped to allow the EU to remain open to fair trade and create and maintain a skilled and dynamic workforce.

We have five actionable priorities to strengthen the EU’s trade defence toolbox. These priorities call for a more assertive trade defence stance, effective anti-circumvention measures, and policies that ensure support for all segments of European industry, including small and medium enterprises (SMEs).

Stronger Use of Trade Defence Tools to Protect EU Manufacturing The EU is a modest user of trade defence when adjusted for the size of our economy. The anti dumping and anti-subsidy measures we impose are way below other OECD countries (mainly but not exclusively US). For example, in 2023, the EU’s anti-dumping duty on Chinese silicon was set at 16.8%, while the US imposed a 139% duty, and Canada set a duty ranging from 47%-235%. This difference makes our trade defence ineffective.

EU duties can be higher within the existing rules ·Environmental and Social Costs: Duties should incorporate differences in environmental and social standards; otherwise, imports that fail to meet EU standards gain an unfair advantage. Re-evaluate the Lesser Duty Rule (LDR): Currently, the EU often applies a “lesser duty” rather than the full anti-dumping duty to reduce consumer impact. However, in many cases, these reduced duties don’t adequately protect EU industries, particularly when large import volumes are involved. Since 2016, the LDR has only been waived twice out of 13 requests from industry, even though full duties are often needed to address injury to EU manufacturers. This rule should only apply when it genuinely benefits EU interests. Consider Import Volume in Injury Calculations: Import volumes should be factored into the injury margin calculations to fully capture the scale of market impact, particularly as EU manufacturers face increased competition from overcapacities abroad.

Enhanced Anti-Circumvention Measures Where duties are bypassed through circumvention methods like re-routing, re-formulating and switching manufacturing, trade defence measures are undermined. Strengthening monitoring, increasing transparency, and enabling data-sharing between EU agencies (such as DG Trade, OLAF and the EPPO) should help identify and counter these practices effectively.

Support for SMEs in Trade Defence Participation SMEs face substantial barriers in engaging in trade investigations due to complex reporting requirements and deadlines. Simplified procedures and flexible timelines would enable them to participate more effectively, making it easier for them to defend against unfair trade practices.

Ensure Trade Agreements Support Europe’s Strategic Raw Materials Needs The EU’s Free Trade Agreements (FTAs) should prioritise Europe’s critical raw materials supply chain, in line with the goals of the Critical Raw Materials Act. Current FTA negotiations must carefully balance the need for reliable supply with the protection of EU industries already facing unfair competition. This means: Tailoring Tariff Liberalisation: Avoid unnecessary tariff reductions for critical raw materials, like aluminium, where EU industries are vulnerable to overcapacity and unsustainable production practices in exporting countries. Promoting Fair Competition and High Standards: FTAs should enforce strict Rules of Origin and include sustainability clauses that align with EU standards. This ensures fair conditions for EU companies and helps meet Europe’s environmental and social commitments

PR Event: “CBAM in action: Lessons Learned & Industry Perspectives - One year of CBAM

AEGIS Europe, CLK Europe and Geneva Trade Platform Conclusions from the event “CBAM in action: Lessons Learned & Industry Perspectives - One year of CBAM

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Geneva, 6 November 2024. AEGIS Europe, Cassidy Levy Kent Europe (CLK Europe) and the Geneva Graduate Institute co-organised an event in Geneva to present the experience and lessons learned under the EU’s CBAM during the transitional phase, and report on the first months of implementation of CBAM. In addition, the event examined carbon pricing policies and border measures that have been enacted or are being considered in other countries.

Special attention was devoted to their impact on competitiveness and the views of industry in respect of CBAM and related measures. One of the goals of this event was to share the views and experience of the industry and to bring WTO Member delegates and other Geneva-based stakeholders in contact with industry voices experiencing CBAM and related measures on the ground.

The introductory remarks were delivered by Joost Pauwelyn (professor at the Geneva Graduate Institute and founding partner of CLK Europe), who outlined the three main themes to be addressed during the event. ▪ Lessons learned from the first year of CBAM’s transitional phase implementation, along with the data gathered thus far. ▪ Third countries reactions to CBAM and the potential for the system to be replicated elsewhere. ▪ Industry perspective, focusing on the challenges that the companies face in relation to the measure.

After the introductory remarks, the event kickstarted with the insights from the European Commission Head of Unit for CBAM, Energy and Green Taxation within Directorate-General for Taxation and Customs Union (DG TAXUD) Vicente Hurtado Roa, who shared the report of the first months of CBAM implementation. The key findings stem primarily from the analysis of the data collected by the European Commission to date.

▪ It was showed that in the first year of operations most of importations (i.e. around 80% in terms of volume) have been made by less than 20% of all importers.

▪ In terms of default values and actual emissions, the last reporting covering Q3 2024 revealed that around 50% of the declarations are made using actual emissions, despite the fact that one has the possibility to use default values.

▪ In 2025, likely in July, the European Commission is bound to publish a report on the impact of CBAM and on the possibility of extending, by 2030 at the latest, the scope of the measure also to other EU ETS sectors.

▪ Other important elements that the European Commission is currently collecting and analysing data on are the impact of CBAM on the EU industry, the question of the phasing out of the free allowances and the impact on exports. ‘’The introduction of CBAM is a measure on the imports, but the idea is also to analyse the impact on the exports’’, said Vicente Hurtado. On the complexity of the mechanism, he added “We will come up with some simplifications that will solve many issues for small importers and exporters, metrics and verifications, but we are still discussing internally; and more will be revealed at the beginning of the year.’’

The panel continued with the intervention of Dr. Chantal-Line Carpentier (UNCTAD), presenting a report issued by the WTO, World Bank, IMF, OECD and UNCTAD on Carbon pricing, policy spillovers, and global climate goals. Ms Carpentier presented the point of view of international organizations and developing countries on the CBAM. She reminded everyone that different countries might have different approaches to carbon measures, different ambitions and means to achieve them as enshrined in the Paris Agreement, pointing out the principle of Common but Differentiated Responsibilities (CBDR). Furthermore, many developing countries, especially LDCs, might not yet be ready to implement similar measures and rather use different tools such as subsidies and taxes, which OCED countries have tended to use before getting to carbon pricing.

As for the role of international organisations, it was said that they can assist the European Union with CBAM, and others with coordination and cooperation on these Border Carbon Adjustments, especially when various mechanisms with different requirements, measures and products will be put in place in different countries. The Report also mentions the cross-border spillover effect, namely the EU CBAM could positively impact third countries to also consider carbon price measure, by stimulating investment in renewable energy, green technologies etc., and at the same time by possibly reducing the demand for fossil fuels, that developing countries still heavily rely on. However, it will also negatively impact terms of trade of developing countries.

As a general tenet, carbon border measures should be designed so that they maximise the greenhouse gas effect reduction while minimising the adverse impact on third countries, considering that some of the latter need assistance to decarbonize their economy and fulfil required monitoring, verification and reporting costs. Inès Van Lierde (Co-chair AEGIS Europe) took the floor to present AEGIS Europe’s work and its position on CBAM. AEGIS Europe is an alliance representing more than 20 sectors that account for more than 500 billion euros in annual turnover and millions of jobs across the EU. ‘’Our priority is that our 2 members compete on a level playing field, fair and international competition: we should be giving priority to fair trade over free trade’’.

Renaud Batier, (co-chair of AEGIS Europe and Director of Cerame Unie), presented the industry’s concerns and asks. Among the concerns, he pointed out the need to simplify and reduce the administrative burden, not only for SMEs but also for larger companies as such burden might disincentivize investment in the EU. Other issues that he reported concern the difficulty in accessing accurate emissions data from suppliers, and the problem of double reporting. The latter represents an issue since European installations under the EU ETS system exporting goods outside Europe, that are then processed and re-imported as further complex goods listed in Annex I of the CBAM Regulation, are required to double report emissions data already provided under the ETS system to their suppliers in third countries. A very important point that was stressed by Renaud Batier is the need to assess the effectiveness of CBAM before extending its scope, and this assessment should have as a departing point a consultation of the industry. To do so, it is important to define the assessment criteria which will be used and to conduct a prior thorough impact assessment by consulting the industries concerned. Another element of paramount importance for the industries is the export dimension, as stressed in the Draghi report: “CBAM needs a WTO-compatible export solution for CBAM sectors to avoid carbon leakage and the replacement of EU low-carbon products with high-carbon alternatives on global markets’’ said Renaud Batier.

There is a high risk of circumvention of the tool: anti-circumvention rules must be strengthened to ensure the effectiveness of the measure and avoid practices such as resource shuffling. Finally, after one year of transitional period, some of AEGIS Europe’s members have experienced issues with carbon footprint data reporting in terms of accuracy, veracity and overall quality. These issues also increase the risk of circumvention and further undermine the efficiency of the CBAM. Once again, the industry calls for its involvement in the assessment of carbon footprint data.

After the industry perspective, Joost Pauwelyn opened and moderated the roundtable, with the interventions of Vicente Hurtado Roa (European Commission, DG TAXUD), Chantal-Line Carpentier (UNCTAD), Adolfo Aiello (Eurofer), Aashish Chandorkar (Indian Mission to the WTO) and Ben Rake (UK Mission to the WTO). Aashish Chandorkar (Indian Mission to the WTO) provided valuable insights about how certain developing countries reacted to the EU’s CBAM. He stressed once again the Common but Differentiated Responsibilities (CBDR) principle and highlighted the risk of fragmentation stemming from various CBAMs implemented around the world: if each of them employs a different way of defining emissions and measurement thereof, then SMEs would have difficulties in navigating so many various rules that refer to the same thing but in slightly different ways.

Ben Rake (UK Mission to the WTO) provided his overview on the recently adopted UK CBAM, stressing that the UK government is carefully listening to the public and to the industry. He also reminded that there is an agreement on the need to strengthen the international cooperation around the various CBAMs. Adolfo Aiello (EUROFER) shared the perspective of the EU steel industry, the largest sector subject to the CBAM, stressing that the steel sector has an important element of complexity due to different production methods with different emission intensities, and global trade patterns. While simplification is fundamental, the trade off should not be less effectiveness. About transparency, he mentioned that the steel sector believes that the CBAM should mirror the functioning of the ETS, where a lot of information about EU companies is publicly available. He stressed once again that the export dimension of the CBAM should not be overlooked and be seen as a priority.

The audience addressed some questions to the speakers referring to aspects such as: simplification, lower administrative burden, effectiveness, circumvention, loopholes, exports, resource shuffling, inward processing and outward processing. The conclusions were presented by Hervé Jouanjean (CLK Europe) and Yves Melin (founding partner of CLK Europe). Hervé Jouanjean stressed the importance of the key words used during the event, which should also be the key elements on which the European Commission will have to work on, such as simplification, coordination, fragmentation, loopholes, resource shuffling, circumvention, administrative burden, exports dimension. Yves Melin identified two issues within the CBAM that the European Commission should address: the first one is effectiveness, since CBAM declarants will be responsible for placing the goods on the EU market, the screening of who can be a declarant must be effective bearing in mind that the declarants in question will face pressure from their customers and difficulties in verifying the accuracy of the emission data they get. Secondly, exports: an export adjustment would be WTO compatible, and it is critically needed to ensure that the EU’s industries, leading in decarbonation, are allowed not just to survive, but to strive. The EU won’t be able to achieve its goal to decarbonise the production of goods consumed on its market if EU industries are not incentivised and sufficiently competitive on world markets.

Overall, the criticalities that emerged during the discussion were:

• The complexity of the system and the administrative burden. Simplifications are needed.

• The effectiveness of CBAM and the criteria to assess it. Effective enforcement is critical.

• The need to strengthen international cooperation and coordination around carbon leakage measures.

• A high risk of circumvention of the tool, especially via resource shuffling, and a need to address loopholes; the risk of circumvention must be monitored at customs level. The authorisation process for CBAM declarants should ensure that they are sufficiently skilled to detect this.

• The absolute need of an export solution to ensure that the EU industry, leading on decarbonation, can carry out its activity on level playing field and thus its competitiveness is not undermined on global markets to the detriment of the environmental objectives of the EU’s CBAM and ETS.

  Looking Ahead CBAM represents a transformative step in global climate policy, but its success hinges on effective implementation and international cooperation. Without addressing critical challenges such as export competitiveness and anti-circumvention measures, the mechanism risks undermining European industries, potentially driving production—and higher emissions—overseas. As the EU refines its approach, industry and policymakers must collaborate to ensure that the CBAM strengthens GLOBAL’s decarbonisation efforts while safeguarding its industrial base. The upcoming 2025 impact report will be pivotal in determining CBAM’s effectiveness and its role in preventing the deindustrialisation in the EU.

AEGIS Europe position on the WTO Trade and Environmental Sustainability Structured Discussions (TESSD) on climate friendly goods

AEGIS Europe position on the WTO Trade and Environmental Sustainability Structured Discussions (TESSD) on climate friendly goods

AEGIS Europe, the umbrella association representing more than 20 key manufacturing industries in the European Union, is closely following the ongoing discussions on trade and environmental sustainability taking place at the WTO within the Trade and Environmental Sustainability Structured Discussions (TESSD). Launched in November 2020 for interested members among them the European Union, to complement the work of the WTO Committee on Trade and Environment, the TESSD deals with topics such as trade and climate change, trade in environmental goods and services, circular economy, and sustainable supply chains. Our membership has been following the progress of the debates held within the TESSD, in particular the ones exploring opportunities for facilitating trade in environmental goods and services (EGS), namely through tariff liberalisation and removal of Non-Tariff Barriers (NTBs). AEGIS Europe is extremely concerned about the turn that the discussions have taken lately.

AEGIS Europe would like therefore to underline some key principles to be considered during the structured discussions to ensure that any liberalisation of trade in climate friendly goods and services occurs in a manner that is truly sustainable and respectful of the need to maintain a level playing field globally:

a. Need to allow measures to maintain a level playing field Discussions about the liberalisation of EGS do not take place in a vacuum. The reality is that due to government-induced distortions and a lack of sufficient local demand, there are major production overcapacities for a number of products in the value chains of climate friendly goods (examples are given below).

These overcapacities, which in many cases continue to grow, in turn have fed waves of dumped and subsidised products in other countries’ markets. At present, the only practical tool to address these consequences of major overcapacities, and unfair trading practices in general, is the trade defence toolbox, and the TESSD should not overlook the critical and positive role that current trade defence measures play in redressing unfair trade practices, including those related to massive government-supported overcapacities. Many goods being considered in the TESSD meetings are subject to trade defence measures in the EU and globally. Those measures are critical to maintaining a level playing field, which in turn is essential not just for avoiding further injury to the industries concerned, but also providing a stable environment that will encourage further local investment in truly sustainable production of goods important for the environment.

Goods produced by AEGIS Europe members and non-members e.g. silicon, biodiesel, electric bicycles, electrical vehicles are subject to trade defence measures or surveillance monitoring in order to ensure a level playing field for the EU producers. AEGIS Europe is also worried by the mention of “inappropriate use of trade remedies” as an example of supply chain bottlenecks. To begin with, there is no indication of what would constitute an “inappropriate use” of trade remedies.

Also, the general principle – as noted above – is that trade remedies are the only practical tool to counter illegal or unfair trade practices, and must by all means remain available. It is true that the EU has seen examples of other countries, primarily China, using trade defence investigations as a means of retaliation and attempted coercion, and that practice is rightfully condemned, but that is not a reason to criticise the use of trade defence measures as a matter of principle.

b. Need to have clarity and consistency with other EU policies With regard to the Statement by the TESSD co-convenors2, issued on the occasion of the 13th WTO Ministerial Conference (February 2024), AEGIS Europe members express several concerns regarding the following:

▪ There is no clear definition of “environmental goods and services”.

▪ The scope of the list of environmental goods, identified by HS codes, is very broad and goes beyond energy-related goods (e.g. agriculture); some of the goods listed have a dual-use which cannot be grasped by the HS classification nor the product description. Therefore, any discussion on trade liberalisation of these goods will go beyond the objectives of the TESSD.

▪European producers are subject to rigorous certification and technical requirements, particularly regarding sustainability criteria, while this is not the case for other third-country producers. Producers need to compete at the same fair level, therefore, no exemptions in sustainability should be accepted: relaxing those rules for third countries would put EU producers in an uncompetitive position and would slow down the achievement of the EU decarbonisation targets.

▪ It is also imperative for the EU to ensure consistency with other EU policies and objectives, such as the Carbon Border Adjustment Mechanism and make sure that no exemptions are granted under the latter since it would ultimately undermine the EU’s Green Deal goals.

▪ Creating exemptions to existing European legislation could create dangerous precedents particularly in the areas of health, environment and safety. This is contrary to the co-decision process involving the European Parliament and the Council in the adoption of European Regulations. In the name of “principles” (in this case: the alleged environment protection) exemptions to other regulations, such as REACH, might be requested precisely to escape any control and thereby jeopardising human health or the environment. This is unacceptable. Moreover, AEGIS Europe has noted that some important topics are not reflected in the document and recommends their inclusion in the discussions, due to their significant relevance in trade related climate discussions:

▪ Massive overcapacities, already anticipated above, combined with aggressive pricing policies are permanently disrupting international markets. This is particularly the case of products 2Statement by the TESSD co-convenors accessible at WT/MIN(24)/11/Add.3 2 made in China and India. The slow development of domestic demand in those countries further pushes their producers to export to large consumer markets like Europe mostly under predatory pricing conditions. Hence the elimination of existing tariffs would jeopardise the European industry, which is operating under stricter standards and rules.

▪ Many emerging economies allow business to be based on lax social and labour standards. Countries like China, India and Pakistan were found by the International Labour Organisation (ILO) to use child and forced labour3. Liberalisation of tariffs should definitely not cover EGS produced in such conditions.

▪ Third countries engaging in illegal subsidisation4 and government support5, as well as export restrictions that disrupt the global level playing field should not be rewarded with any sort of tariff liberalisation.

AEGIS Europe also expresses concern regarding the statement in the Summary of Discussions issued following the TESSD working group meeting of 15-16 April 2024 according to which members agreed to further refine and expand the indicative lists of environmental goods and services and that such list should be guided by environmental objectives. We reiterate that the environmental objectives of such goods cannot be the only factor under consideration. Other key international policies need to be considered as well, such as whether international labour and social standards have been complied with when manufacturing such goods.

Furthermore, in the Summary of Discussions issued following the TESSD working group meeting of 17-18 June 2024, there is a clear statement about the willingness [of the TESSD members] to work towards tangible outcomes and concrete actions by MC14, which is of high concern for the EU industry.

Practical examples

Below several practical cases about the current status of the EU industries whose products have been part of the discussions at the level of the TESSD.

In what concerns the ethanol industry, the current tariffs are already too low8; they have been set in 2000 and have not been revised since. In addition, only big exporters such as Brazil and USA pay duties whilst the rest of the world is exporting duty-free to the EU since they do not reach the quota. This happens in the context that costs of production for EU producers have skyrocketed since 2000, and the existing tariffs are no longer effective in ensuring a level-playing field for the EU industry. The EU ethanol industry is fighting to raise the tariffs to match the economic realities in the EU. Countries like U.S. and Brazil as an example, regularly revise their tariffs for ethanol to meet the economic realities.

Silicon is on the Critical and Strategic raw materials lists part of the Critical Raw Materials Act since it represents a key raw material in the solar PV value chain, needed to produce polysilicon that then is embedded in the PV cells of solar panels. China is the biggest silicon producer in the world, its current capacities exceed the 7Mt, almost twice the worldwide silicon consumption in 2023. China has plans to expand its silicon capacities by another 4.6Mt. Despite such massive overcapacity threat, Europe has only imposed an anti-dumping duty of 16.8% against Chinese silicon which is definitely not sufficient to preserve a level playing field especially bearing in mind that like-minded countries such as the US and Canada have a duty of 139%, respectively 47-235% imposed on the same Chinese product. Silicon is definitively a strong example of massive overcapacities combined with predatory pricing.

Most recently, the EU imposed provisional anti-dumping duties (12.8%-36.4%) on imports of biodiesel from China, after using trade defence instruments also against unfairly traded biodiesel from Argentina, Indonesia and the United States. In addition, the EU biodiesel market is seriously damaged by fraudulent imports of biodiesel, especially from China, made from palm oil (which the EU wants to phase out) that is mislabelled as made from used cooking oil (or UCO, which the EU wants to favour). This is happening because of inherent problems with verification and certification.9 In this context, there can be no question of removing tariffs for ethanol, biodiesel or silicon or of softening the imposition of Non-Tariff Barriers (NTBs) on the importation of such products, as this would simply lead to the disappearance of the industries in Europe and negatively impact Europe’s green transition. d. Conclusion 8The current ethanol tariffs are: 19,2 EUR/hl for undenatured and 10,2 EUR/hl for denatured.

AEGIS Europe is therefore extremely concerned about the direction of the structured discussions and the embedded risk of pushing for measures which would remove the EU’s ability to take actions essential for maintaining a level playing field, in particular for EU industries that have invested considerably in achieving the objectives of the Green Deal. We urge the Commission to consider with the utmost caution the real added value of these discussions and the underlying role they could have in dismantling existing European legislation. The often-cited barriers to trade with Europe are contradicted by the proven increase in imports into Europe. Regarding future discussions at the TESSD, a Communication10 from the United States raises concern to the extent it may result in premature pressure to adopt measures that have not been properly reflected upon. AEGIS Europe urges the European Commission to bear in mind our concerns and to preserve all means for ensuring a level playing field to the benefit of the EU industry.

Draghi Report sparks call for stronger EU Trade and Industrial Policies from AEGIS Europe

Draghi Report sparks call for stronger EU Trade and Industrial Policies from AEGIS Europe (PDF)

Brussels, 1 October 2024 – With the release of Mario Draghi's long-anticipated report, The Future of European Competitiveness, AEGIS Europe—an alliance of over 20 European manufacturing associations and companies—joins the call for decisive action to safeguard the EU's manufacturing base, which is currently in deep crisis: "The global trading system, based on multilateral institutions, is in deep crisis, and it's uncertain if it can be restored.

Unfair trade practices are rising, creating an uneven playing field for EU businesses. While the EU should continue its efforts to reform the WTO – and especially to unlock the dispute settlement mechanism – it must urgently adapt its trade policy to this new reality, as the current approach underestimates the severity of the situation," commented Inès Van Lierde, co-chair of AEGIS Europe.

AEGIS Europe welcomes Draghi's call to closely monitor and improve the design of the Carbon Border Adjustment Mechanism (CBAM) during the transition phase and evaluate delaying the reduction of free ETS allowances if CBAM proves ineffective. Furthermore, export adjustments must be considered to prevent low-emission EU products from being displaced by higher-emission imports. AEGIS Europe fully endorses Draghi's recommendation for the swift application of trade defence instruments, including ex-officio investigations for manufacturing industries, as an uneven playing field can have repercussions for many downstream sectors and poses risks to our strategic autonomy.

Additionally, AEGIS calls for more effective measures to tackle non-market excess capacities. The EU should consider adopting clear-cut border measures, similar to those used by the US and Canada under their existing trade policies (e.g., Section 301 in the US and Section 53 in Canada), to address non-market excess capacities. These measures could generate revenue and offer an effective short-term solution, complementing other approaches like subsidies or energy price controls, which may require more structural and long-term strategies. The EU urgently needs greater alignment between its trade, industrial, and environmental policies. This means ensuring the complementarity and proper implementation of key legislation, such as the Net Zero Industry Act (NZIA) and Critical Raw Materials Act (CRMA), and introducing a strong, forward-looking EU's industrial strategy.

These steps are essential to achieving the twin transition and fostering a stronger, more predictable manufacturing environment. For investors looking to back this transition, a coherent regulatory framework is key but currently lacking. AEGIS Europe shares Draghi's assessment of the negative impact of rising energy and electricity prices on the EU's industry and urges the new Parliament and Commission to take swift action to reduce these costs to levels that allow the industry to remain competitive at the international level.

The alliance also supports proposals to level the global playing field for EU industries by leveraging public procurement via procedures rewarding innovative and sustainable solutions, foreign direct investment screening, and an EU export credit facility. "The EU needs a more comprehensive strategy to revive and secure a better future for the EU manufacturing sector by implementing robust trade and industrial policies that restore the level playing field," concluded Renaud Batier, co-chair of AEGIS Europe.

Media contact: email: info@aegiseurope.eu | www.aegiseurope.eu

About AEGIS Europe: AEGIS Europe is an industry alliance that brings together more than 20 European manufacturing associations and companies representing the whole value chain from metals and ceramics to transportation industries committed to manufacturing in the EU on a truly level playing field ensured by a rules-based free and fair international trade. Our members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.

AEGIS Europe urges the EU to act against excessive non-market capacities threatening EU manufacturing

AEGIS Europe urges the EU to act against excessive non-market capacities threatening EU manufacturing (PDF)

Brussels, 19 June 2024 – AEGIS Europe, an alliance representing over 20 key EU manufacturing sectors, urges immediate action from the European Union to address the critical and unprecedented threat posed by economically irrational excess production capacities, especially from China and other emerging economies. This trend is particularly alarming as most of the AEGIS Europe’s members are seriously impacted, while they are essential to achieve the EU Green Deal and ensure our economic security. This issue was acknowledged by world leaders in their conclusions of the G7 (Italy, 13-15 June 2024).

While AEGIS Europe welcomes the recognition of the need to have an appropriate and effective toolkit, we believe that engaging in diplomatic discussions with the countries contributing to overcapacities worldwide is, by far, not sufficient. Since the situation has worsened dramatically over the last years, the Union industry needs effective and immediate measures, as a matter of urgency. The build-up of economically irrational excess production capacities in various industries2 is causing global market disruptions due to unsustainably low prices, undermining the EU’s competitiveness.

In China, the economy is strategically planned to dominate globally important sectors, such as steel and aluminium, posing a systemic risk to the EU’s economic future. Other countries are instead fuelled by the desire to have national champions and new production facilities focused on exports, often built with Chinese state-backed subsidies.

While the United States has reacted timely by introducing the Inflation Reduction Act to support their domestic industries and imposing tariffs on key imports such as steel and aluminium, but also on electric vehicles, solar cells, and lithium batteries for EVs, “The EU’s response lacks the urgency and effectiveness needed to protect its manufacturing sectors from massive overcapacities that are flooding the markets and dragging global and/or regional prices down”, commented Inès Van Lierde, co-chair of AEGIS Europe. “As traditional trade defence instruments can deal only partially with this situation, an immediate and robust EU action plan is urgently needed to restore a level playing field and facilitate future investments in the EU.

The upcoming entry into force of the countervailing duties on Chinese EV is a step in the right direction, but not sufficient to tackle the systemic issue of worldwide overcapacities”, she continued. AEGIS Europe urges therefore the adoption of necessary legislation to allow the imposition of punitive tariffs or equivalent measures at the border on goods from countries supporting (directly or indirectly) these excess capacities.

Furthermore, AEGIS Europe suggests a relaxation of injury requirements in trade defence investigations for the affected sectors and emphasises the need for the inclusion of provisions in EU Free Trade Agreements allowing the Union to counteract. “The European manufacturing stands at a crossroads: immediate and decisive action is required to give relief to an EU industry that is already suffering. Without such measures, we risk compromising our economic security and the future of the EU’s industrial base”, concluded Renaud Batier, co-chair of the Alliance.

AEGIS Europe welcomes WindEurope as new member of the Alliance

AEGIS Europe welcomes WindEurope as new member of the Alliance (PDF)

Brussels, 21 May 2024 – AEGIS Europe, representing over 20 European manufacturing associations and companies across the whole value chain, is extremely pleased to announce that WindEurope, the European Wind Energy Association, has joined the Alliance. “This collaboration is the fruitful outcome of the work carried out by AEGIS Europe and will strengthen our collective efforts in addressing common challenges faced by European industries”, commented Inès Van Lierde and Renaud Batier, co-chairs of AEGIS Europe.

AEGIS Europe looks forward to the valuable contributions that WindEurope will bring to our Alliance, fostering our collective efforts to restore a level-playing field and maintain fair international competition. “By becoming members of AEGIS Europe, we will contribute our knowledge, insights and resources to support the advancement of our shared goals”, said Giles Dickson, CEO of WindEurope. “Last year, the European Commission launched the Wind Power Package to strengthen Europe’s wind industry. 26 Governments and more than 300 companies then signed the European Wind Charter, committing to implement the Package. The Package and Charter are clear that the expansion of wind energy in Europe should be made in Europe. Joining AEGIS Europe will help us make further progress towards that goal”, he concluded. Together, AEGIS Europe and WindEurope are committed to promoting a competitive and sustainable European industrial landscape and look forward to leveraging our combined expertise and resources to drive positive changes and secure growth and prosperity for our industries and economies.

AEGIS Europe & industriAll Europe warn about the gloomy future of manufacturing in Europe

AEGIS Europe & industriAll Europe warn about the gloomy future of manufacturing in Europe and propose ways to combat growing deindustrialisation and ensure good industrial jobs in the EU (PDF)

Brussels, 21 March 2024 – Today, AEGIS Europe and industriAll Europe jointly hosted their event Manufacturing Europe’s Future: How to combat growing deindustrialisation and ensure good industrial jobs? to debate the pressing issue of Europe's rapidly declining industrial output and the need for strategic action to revitalise the manufacturing sector and secure jobs in Europe.

The representatives of the industry and trade unions were happy to welcome DG GROW’s Director General Kerstin Jorna & DG TRADE’s Deputy Director General Leopoldo Rubinacci and about 150 participants. The long and short-term figures assessing the performance of EU manufacturing clearly show a strong erosion of competitiveness. For almost all industrial sectors, there is a rapidly increasing reliance on imports and declining export opportunities.

Overcapacities, particularly in emerging economies with lower ESG standards compared to Europe, are growing. “This trend is particularly alarming, not only within the sectors represented by AEGIS Europe but also in other sectors. They all are essential to achieve the objectives of the EU Green Deal and ensure our economic security”, commented Inès Van Lierde, co-chair of AEGIS Europe.

The decline in European employment figures, production curtailments and closures, most of them definitive, due to high-cost levels – notably the sky-rocketing energy prices – underscore the urgency of implementing a comprehensive industrial policy at the EU level. “Europe needs an Industrial Deal to complement the Green Deal. Public and private investment, social conditionalities and regulatory coherence are essential for maintaining a strong industrial base on the continent and for keeping and creating good industrial jobs”, commented Judith Kirton-Darling, General Secretary at industriAll Europe.

Moreover, enhancing trade policy is equally crucial to restoring Europe's competitiveness: effective trade defence measures are necessary to counter unfair trade practices and safeguard European industries. The collapse of the solar panel industry in Europe due to years of aggressive dumping from China serves as a reminder of the consequences of inaction. “The EU must adopt a more strategic and comprehensive approach to revitalise and secure a stronger future for its manufacturing sector.

This involves implementing robust trade and industrial policies aimed at restoring fair competition and preserving the Union's leadership in the global marketplace”, remarked Renaud Batier, co-chair of AEGIS Europe. In conclusion, the event highlighted the critical need for immediate action to prevent further deindustrialisation and promote a sustainable industrial renaissance in Europe. As the EU moves to the next political cycle, it is imperative for policymakers to prioritise the development and implementation of effective industrial and trade policies to secure the future of European manufacturing.