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Welcome to Sandbag’s October newsletter!
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Over the past months, Sandbag has expanded its work across three core themes — the CBAM, the EU ETS & Carbon Removals, and Electrification- from modelling global trade impacts and salvaging the ETS to charting pathways for cleaner industrial electrification ahead of the CBAM’s rollout in 2026.
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Our latest updates
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CBAM
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Sandbag contributes to “Economic and Political Incentives for Climate Action: Creating a Business Case for the Private Sector”
(30 October 2025)
Sandbag contributed to the Konrad Adenauer Stiftung (KAS) and Climate Action Platform – Africa publication Economic and Political Incentives for Climate Action: Creating a Business Case for the Private Sector.
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In this collection, Sandbag’s Adrien Assous authored “The EU CBAM: A Two-Way Street Between the EU and Africa” (page 59), examining how the EU’s carbon border policy can promote industrial competitiveness and sustainable trade between Europe and Africa.
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CBAM Simulator Launch: Explore Trade Impacts and Policy Responses (16 October 2025)
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Sandbag launched its open-access CBAM Simulator, a modelling tool that explores how carbon fees and third-country responses shape CBAM costs across countries. It is the first tool of its kind to let users adjust strategies that may influence outcomes. Users can compare fees paid versus revenues from higher EU prices — thereby simulating net CBAM costs.
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CBAM Impact on US Trade: An Analysis (24 September 2025)
This research note finds that CBAM’s real trade impact on the US is minimal — less than 0.1% of US exports of goods. The findings challenge claims of unfair trade barriers and show that CBAM’s costs for US exporters remain modest even under expanded coverage scenarios.
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The EU CBAM: A Two-Way Street to Climate Integrity? (25 August 2025)
This flagship study assesses CBAM’s global trade and climate impacts, estimating the full phase-out of free EU allowances worth €35 billion under an expanded CBAM scope. It finds that CBAM’s net costs to third countries are modest and shows to what extent carbon pricing abroad could reduce these costs.
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ETS and Carbon Removals
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New report and simulator: Simulating CDR in the EU ETS – The Risks of Premature Integration (9 July 2025)
Sandbag released a new report and interactive simulator analysing how the early integration of Carbon Dioxide Removals (CDR) into the EU Emissions Trading System could affect emission reductions, carbon prices, and market stability.
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The ETS + CDR Simulator allows users to explore policy pathways and model the potential consequences of early CDR inclusion, showing that premature integration could displace vital near-term abatement and distort price signals.
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Electrification
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Getting Electrification Right: The Broader Challenge of Induced Emissions (12 June 2025)
This report explores how the timing and location of electricity use shape its true climate impact. Even when electricity is “renewable” on paper, producing hydrogen or powering industry at times of fossil-based generation can drive induced emissions. Sandbag calls for a more strategic approach to electricity use — ensuring decarbonisation policies avoid these unintended consequences and genuinely reduce emissions.
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You can read all of our publications on our website here.
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Beyond the sliding scale
Our upcoming policy brief examines the “sliding scale” approach to steel labelling, in the context of the Industrial Accelerator Act’s forthcoming low-carbon product label. The paper outlines its conceptual limitations and proposes an alternative label framework for evaluating industrial decarbonisation performance.
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Chemicals in the CBAM
Our upcoming policy brief will examine why and how more chemicals could be covered in the CBAM framework. It will set out how key value chains could be covered initially, with gradual expansion over time.
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CBAM and Africa
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We will produce more research on the impact and opportunities of CBAM on specific African countries.
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Policy Radar
Major EU initiatives we’re tracking
Public consultation on the Electrification Action Plan and the Heating & Cooling Strategy — Open until 20 November 2025, this consultation will feed into the Commission’s work on both initiatives, due in early 2026.
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CBAM Scope Extension Review — The Commission will examine expanding CBAM to chemicals, plastics, and downstream products by December 2025.
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Anti-Circumvention Strategy for CBAM — A year-end proposal will target ways to prevent circumvention and strengthen CBAM’s integrity across global supply chains.
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Industrial Accelerator Act — Expected before year-end, this initiative will shape the framework for EU industrial decarbonisation funding and the use of performance labels.
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Sandbag in Action: Engaging on the CBAM, the EU ETS, and Industrial Decarbonisation
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Sandbag has participated in high-level events and dialogues to advance evidence-based industrial climate reform. From launching new simulators to contributing to international debates on the CBAM, CDR, and electrification, we continue to make the case for ambitious and effective EU climate policy.
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CBAM
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KAS Conference – Emission Reduction as a Business Case for the Private Sector in Middle-Income and Developing Countries
(Berlin, 14 October 2025)
Hosted by the Konrad Adenauer Stiftung (KAS), the conference gathered experts from Ghana, Kenya, and Germany to discuss how CBAM can promote cleaner industrial growth in Africa. Sandbag’s Adrien Assous presented insights from our report, “The EU CBAM: A Two-Way Street Between the EU and Africa.”
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KAS Policy Dialogue – The EU CBAM: A Two-Way Street to Climate Integrity?
(Brussels, 15th September)
Sandbag discussed findings from its CBAM report at a high-level policy dialogue hosted by the KAS Multinational Development Policy Dialogue – Brussels, alongside DG TAXUD, industry, and trade experts.
We were joined by Vicente Hurtado Roa, Head of the CBAM Unit at DG TAXUD, as well as representatives from the European Parliament, Member States, and third countries. Discussions covered how industry in third countries might fare compared to EU peers, how the EU could address resource shuffling, and how quickly the CBAM can evolve.
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ETS and Carbon Removals
Webinar – Simulating CDR Integration in the EU ETS (Online, 9 July)
The event marked the launch of Sandbag’s interactive simulator and the publication of the accompanying analytical report, providing policymakers and experts with evidence-based insights into the risks of integration of CDR into Europe’s carbon market.
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The webinar featured Michael Bloss MEP and Sandbag’s Industrial Decarbonisation Analyst Duncan Woods, who emphasised that market integrity is at risk and careful governance is essential to ensure removals complement — rather than distort — the ETS.
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The EU ETS at a Crossroads (8 July 2025)
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In its submissions to the European Commission’s consultations on the EU ETS revision and Innovation Fund, Sandbag calls for a smarter, fairer carbon-market design. Key recommendations include reforming free allocation, linking indirect cost compensation to carbon-free electricity, limiting airline access to stationary ETS allowances and reforming the Innovation Fund to better assess project carbon footprints and reward higher-risk innovation.
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Electrification
Electrification or Electrical Decarbonisation? We Need Both! (9 October 2025)
Sandbag’s response to the Commission’s Electricity Action Plan warns that electrification alone will not cut emissions unless the power sector decarbonises faster. Growing electricity demand risks outpacing renewable supply. New “green” electricity replacing other uses may slow down the decarbonisation of fossil power, causing induced emissions. Sandbag calls for policies that simultaneously decarbonise existing generation, reward flexible electricity use, and expand renewable capacity to ensure electrification genuinely reduces emissions.
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Heat Up Industry, Not the Climate! (11 August 2025)
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In feedback on the Innovation Fund’s industrial-heat auction, Sandbag welcomes the focus on indirect emissions but warns that weak timing safeguards could reward high-emission electricity use. Sandbag urge tighter rules linking eligibility to real-time carbon intensity to ensure electrified heat genuinely cuts emissions.
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Sandbag in the News
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Featured commentary and expert insights
August–October 2025
Sandbag’s analysis and expert commentary featured prominently in leading European and international outlets:
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Les Échos (31 Aug) — “Taxe carbone aux frontières : les industriels européens privés de 35 milliards sur dix ans” —
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featuring Sandbag’s estimate that phasing out free allowances under an extended CBAM scope could represent around €35 billion per year.
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CBAM Coverage: Global Media Highlights
August-October 2025
Media outlets across Europe, Asia, and the US reported widely on Sandbag’s CBAM research and simulator findings. Featured coverage included:
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The Hunt (India) (20 Oct) – “Relief for India on carbon border tax; initial financial impact limited, but uncertainty remains”
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Indian PSU (20 Oct) – “EU’s Carbon Border Fees on Indian Exports Likely to Be Minor Initially: Sandbag Study”
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The Hindu (16 Oct) – “Indian iron and steel exporters face highest CBAM levy among EU trade partners”
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Edie (24 Sep) “Trump overstating EU carbon tax threat by more than $4bn”
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Politico Morning Trade (25 Aug)– Reported that CBAM could “generate up to €11.3 billion annually from non-EU companies,” while noting that most costs are likely to be passed on through higher prices.
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Montel News (25 Aug) – “Extended CBAM could remove 430 m free allowances a year” — covering Sandbag’s estimates of how an expanded CBAM could drive faster industrial decarbonisation.
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ETS and Carbon Removals Coverage
July-September 2025
Media outlets covered Sandbag’s ETS + CDR Simulator launch and report publication, which warned that premature integration of carbon removals into the EU ETS could distort price signals and undermine climate ambition.
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Carbon Pulse (9 July) – “Carbon removals risk undermining EU ETS if included post-2030, says think tank.”
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Electrification Coverage
June 2025
Following the launch of Sandbag’s Getting Electrification Right report, media outlets highlighted concerns that ill-timed renewable electricity use and EU hydrogen rules could increase rather than reduce emissions.
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Euractiv (12 June) – “EU green hydrogen rules will drive up emissions, new report suggests.”
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We want to hear from you!
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Do you have feedback on our newsletter? Let us know!
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Stay informed on Europe’s decarbonisation journey — follow Sandbag for the latest analysis, insights, and policy updates.
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