Global Dialogue on Border Carbon Adjustments: The case of Brazil

Table of Contents

• 1.0 Introduction 5
• 2.0 Context 7
• 2.1 What Is a BCA? 7
• 2.2 Why Has BCAs Become a Relevant Topic in the International Agenda? 8
• 2.3 Brazil’s In-Country Process and its Objectives 10
• 3.0 The Expected Impacts of EU’s CBAM in Brazil and the Risks of BCA Diffusion to its Jurisdictions 11
• 3.1 The Relevance of the EU Market for CBAM-Affected Products 11
• 3.2 Brazil’s Relevance as a Supplier to the European Market and Its Main Competitors 14
• 4.0 Reactions and Responses by the Main Stakeholders 18
• 4.1 Response by the Brazilian Government 18
• 4.2 Responses by the Business Sector 18
• 5.0 The Dialogues in Brazil: Stakeholders’ main concerns and stances 22
• 5.1 The First Dialogue: Main statements from stakeholders 22
• 5.2 The Second Dialogue: Key design elements of BCAs, principles and best practices, and implementation issues 23
• 6.0 The Financial Sector Role: A work in process… 27
• 7.0 BCAs as a Public Issue in Brazil: A limited debate 29
• References 31
• Figure 1. Chapter 26 products exports distribution (average participation 2020–2022) 12
• Figure 2. Chapter 72 products exports distribution (average participation 2020–2022) 13
• Figure 3. Chapter 73 product export distribution (average participation 2020–2022) 13
• Figure 4. Chapter 76 products exports distribution (average participation 2020–2022) 14
• Table 1. Brazilian exports of CBAM products – EU (average 2020–2022) 12
• Table 2. The world’s main exporters of CBAM-affected products in the iron, steel, and aluminum sectors 15
• Table 3. EU’s main suppliers of the CBAM-affected products in the iron, steel, and aluminum sectors 15
• Table 4. Relative exposition to the CBAM index for the iron and steel sector: Brazil and its main competitors in the EU 16
• Table 5. Relative exposition to the CBAM index for the aluminum sector: Brazil and its main competitors in the EU 17
• Box 1. CNI’s submission to the European Commission on July 11, 2023: Brief summary 19
• Box 2. CNI recommendations for the design of new BCAs 20
• Box 3. Interview with Joaquim Levy: Summary notes 27