Luca Castagno
From Carbon Leakage to Greenshoring: Industrial Competitiveness in the CBAM Era – The Case of Iron and Steel.
Rel. Ettore Francesco Bompard, Claudia Concaro, Daniele Grosso. Politecnico di Torino, Master of science program in Energy And Nuclear Engineering, 2025
Abstract
In recent years, Europe has experienced a radical shift in its industrial landscape. The urgency to decarbonize, driven by the fight against climate change and the Paris Agreement, has deeply impacted energy-intensive sectors. To address this, the EU introduced the Emission Trading Scheme (ETS) in 2005 to incentivize carbon reductions through pricing. Over time, the ETS has raised the price of CO₂, pushing companies to invest in efficient technologies. However, rising costs and increasing bureaucracy have left many firms at a crossroads. In this uncertain environment, many industries have shifted production to countries with lower environmental standards and energy costs, a phenomenon known as "carbon leakage." This undermines global decarbonization efforts as Europe reports reduced emissions, but imports from high-carbon-intensity countries persist.
To counter this, the EU has introduced the Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2026
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