Our April newsletter is out now!

We share insights from our latest CBAM position paper, technical briefs, and our work on the impact of the CBAM on Algerian and South-East Asian exports to the EU. We also outline our advocacy to strengthen the EU ETS.

👉Our newsletter: sandbag.be?mailpoet_rou...

Carbon pricing trends in asia - Sandbag This report by Carbon Market Watch, with analysis by Sandbag, examines potential CBAM costs for Japan, South Korea, Vietnam, Indonesia, and the Philippines, based on their trade exposure, production o...

Could South-East Asia gain from the CBAM?

Read the new report by @carbonmarketwatch.bsky.social with analysis by Sandbag. It examines potential #CBAM costs for Japan, South Korea, Vietnam, Indonesia, and the Philippines.

sandbag.be/2026/04/13/c...

An opt-in solution to CBAM circumvention and complexity - Sandbag Our position paper on the Commission’s legislative proposal amending the CBAM proposes an opt-in solution to CBAM circumvention and complexity.

📢 Our new position paper highlights ways in which the Commission’s legislative proposal to amend the #CBAM could be improved, to prevent circumvention.

👇 Read how opting for systematic default values would provide benefits to third countries

sandbag.be/2026/04/07/p...

As the EU is preparing to spend another 30 billion Euros of ETS revenues on a new decarbonisation fund, it should be reminded that a strong price signal will always achieve more than a gadget fund.

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Performance-based funding mechanisms - now ensured by a few auction mechanisms - show what a better design could look like. But, the Innovation Fund keeps giving grants using the same weak criteria. Grants should instead focus on real first-of-the-kind projects with significant technology risk.
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The auditors failed to mention a more fundamental flaw of this instrument: the Fund provides upfront financing. This may be appropriate for small scale laboratory projects or pilots where technology risk is real, but less so for hundred-million Euros demonstrators with little technology risk.

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Insufficient project maturity. The pass threshold is set at just 3/5 across all criteria. Despite the objective being a competition for limited funds among qualifying applicants, in some instances, the small number of qualifying applicants has led to all of them being selected by default.

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A biased rating methodology: Citing Sandbag, the report notes that the rating system rewards over-optimistic estimates. This methodology is used for two of the five award criteria and is serious structural flaw.

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❗The Innovation Fund failed to deliver on its emissions reduction promises, according to a new report from the European Court of Auditors.

The report highlights two significant flaws: A biased rating methodology and insufficient project maturity.

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📢 European Council outcomes: The worst was avoided but EU policymakers must still tread carefully on the ETS.

Even the announced measures may lead to a weaker carbon price signal and may undermine the ability of the #EU #ETS to drive long-term emissions reductions.

📢As the #EUCO convenes, the EU Emissions Trading System is facing political pressure – but ambition must be maintained.
The #EU #ETS should not be weakened as a knee-jerk reaction to short-term spikes in energy prices. Investor confidence in future-proof EU industry requires this policy stability.

Don't Ruin the EU ETS! Joint NGO Letter to the European Council - Sandbag Ahead of the March European Council meeting, we’ve joined a group of 35 civil society organisations calling on EU leaders to protect the integrity of the EU Emissions Trading System (EU ETS).

Weakening the #EU #ETS would increase regulatory risk, delay investment decisions and undermine Europe’s #climate leadership.

Ahead of the European Council, we’re urging EU leaders to safeguard a strong and predictable carbon pricing framework.

Read more 👉 sandbag.be/2026/03/11/e...

CBAM and fertiliser inflation in 2026: the facts behind the numbers New Sandbag analysis shows CBAM is unlikely to drive fertiliser price inflation in 2026. Urea prices are more likely set by EU ETS costs and marginal suppliers.

📢Good news for CBAM!

The EU Commission ruled out suspending the EU’s Carbon Border Adjustment Mechanism #CBAM for #fertilisers.

👉 Read more about CBAM and fertilisers: sandbag.be/2026/02/10/c...

Chemicals and CCS/U: Exploring the role of carbon capture in the sector’s transition to ‘circularity’ - Sandbag This technical brief explores the potential role of carbon capture, storage and utilisation (CCS/U) for Europe's chemicals sector.

📢 Carbon capture, storage and utilisation (CCS/U) is often presented as a key solution for Europe’s chemicals sector, but what role can it realistically play?

Our analysis finds that CCS/U has more limited potential in the sector than you might think.

👉 Our analysis: sandbag.be/2026/03/02/c...

📢 The EU ETS free allocation benchmarks are under heavy pressure from industry, says Sandbag to Carbon Pulse

👉 Read the article: carbon-pulse.com/486273/

CBAM Algeria iron exports On 16 and 17 February, Sandbag contributed to a conference in Algiers hosted by the German development agency GIZ and the Algerian Ministry of Hydrocarbons and Mines.

We held a workshop on how the EU #CBAM boosts Algeria’s iron exports at a conference in Algiers hosted by @giz.de and the Algerian Ministry of Hydrocarbons and Mines.

Find out how iron can benefit from the CBAM.

👇 Read the brief:
sandbag.be/2026/02/20/e...

💶🌍A strong, predictable carbon price under the EU ETS is essential.

Weakening that certainty risks delaying modernisation and diverting clean investment elsewhere.

Today we call on national leaders at the informal European Council meeting to recognise the importance of the EU ETS.

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For Sandbag, the evidence is clear:
• The ETS is the central investment signal for industrial decarbonisation
• The existing cap trajectory is already embedded in multibillion euro project pipelines
• Maintaining a strong cap and phasing out free allocation is needed to drive further investment

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📢 EU Industry Summit and Informal EU Leaders’ Retreat: Future competitiveness and ETS stability go hand-in-hand

🇪🇺EU leaders meet today for the Informal EU Leaders’ Retreat, with industrial competitiveness at the centre of discussions following yesterday’s EU Industry Summit.

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CBAM and fertiliser inflation in 2026: the facts behind the numbers New Sandbag analysis shows CBAM is unlikely to drive fertiliser price inflation in 2026. Urea prices are more likely set by EU ETS costs and marginal suppliers.

Since EU producers are likely the marginal suppliers, it is their costs, not importers’, that will likely drive the EU market price.

❗CBAM alone is unlikely to drive significant fertiliser price inflation.

👇 Read the full briefing:
sandbag.be/2026/02/10/c...

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🔎 Key findings:

• CBAM costs for importers and CBAM-induced price rises in the EU are not the same
• For Egyptian urea in 2026, costs could reach €42/t using default values
• Using actual emissions data, costs fall to €7.4/t
• For EU producers, CBAM-linked costs are €1.79/t

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📉 Fertiliser inflation in 2026: to what extent is CBAM the cause?

Recent projections suggest CBAM could raise fertiliser prices by up to 30%.

But what does the evidence show?

A new Sandbag analysis examines how CBAM costs play out for one key nitrogen fertiliser: urea.

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📬 Sandbag’s January newsletter is out!

As CBAM enters its implementation phase, we cover:

• Commission impact assessment citations
• CBAM dialogues in Africa
• Chemicals & CBAM expansion
• Steel & circular economy updates

👉Read it here tinyurl.com/2r93x2dj

👉Subscribe sandbag.be/newsletter-s...

Sandbag analysis referenced internationally

As CBAM enters its first phase, international media across the UK, Middle East, Asia and Australia are drawing on Sandbag’s analysis.

The consistent assessment: CBAM supports EU decarbonisation, with limited early impacts on prices and the economy.

Strengthening the CBAM by Default – Sandbag’s August 2025 Brief Sandbag’s August 2025 brief outlines how systematic default values can strengthen the CBAM—by tackling circumvention, enhancing fairness, and supporting cleaner trade.

👇 Sandbag analysis cited in the Impact Assessment:

Strengthening the CBAM by default — feedback on downstream extension, anti-circumvention and electricity emissions rules
🔗 sandbag.be/2025/08/06/s...

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⚠️Proposed coercive actions could protect against carbon leakage but would add bureaucracy.

🔄An opt-out from actual data reporting should be available for trade partners, with default value mark-ups dropped—if all imports from a country use those values instead of actual data.

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⏱️While no further specific anti-circumvention measures are set out, the proposal empowers the Commission to act “within three months” where there is “sufficient evidence” of a “high risk of abusive practices”.

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Sandbag’s July 2024 analysis “Closing the CBAM scrap loophole – a critical move for climate & competitiveness” is cited in this context.

The Commission proposes including pre-consumer scrap in CBAM emissions for steel and aluminium products.

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The European Commission’s CBAM Impact Assessment (17 Dec) shows that circumvention risks are now being taken seriously.

The assessment explicitly recognises risks of avoidance, including via metal scrap—concerns Sandbag has consistently raised over the past year.

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Free allocation will be phased out under the EU ETS — regardless of CBAM. A better safeguard would be extending CBAM to agricultural products grown using nitrogen fertilisers, covering embedded emissions, rather than weakening the policy.

👇 Open letter from the French PM
tinyurl.com/mrxx72s9

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