Five European industry associations are urging EU policymakers to keep urea and methanol outside the Carbon Border Adjustment Mechanism, warning that additional import costs would raise the price of resins, wood-based panels and furniture without giving manufacturers a practical route to reduce emissions.**<\/p>\n
The European Panel Federation (EPF), the European Confederation of Woodworking Industries (CEI-Bois), the European Furniture Industries Confederation (EFIC), the European Parquet Federation (FEP) and the International Committee of Decorative Laminates Industry (ICDLI) issued the joint appeal as the EU considers the further development of CBAM.<\/p>\n
The organisations support the mechanism\u2019s central objective of preventing production from moving to countries with less demanding climate rules. They argue, however, that imposing carbon costs on essential chemical inputs could produce the opposite result in downstream manufacturing.<\/p>\n
European panel producers depend on imported urea and methanol, while alternative supplies and replacement technologies are not available at the scale required by the industry. Additional costs would therefore not encourage manufacturers to switch to lower-carbon European inputs. Instead, they would increase production costs for companies that must continue purchasing the same materials.<\/p>\n
Essential inputs for panel adhesives<\/strong><\/p>\n Urea and methanol are positioned several stages upstream from the finished panel or furniture product, but both are important to the sector\u2019s adhesive systems.<\/p>\n Technical-grade urea is used to manufacture amino resins. Methanol is a principal feedstock for formaldehyde, which is subsequently used in resins for particleboard, MDF and other wood-based panels. These adhesives are required to meet established technical, safety and performance specifications.<\/p>\n Panel manufacturers have limited influence over emissions generated during the production of the two chemicals. They also cannot replace them immediately without affecting product performance, availability or costs.<\/p>\n The associations maintain that the EU does not currently produce enough urea or methanol to cover domestic demand. Import dependence is therefore structural rather than a purchasing choice that could quickly be corrected by switching suppliers.<\/p>\n Under these conditions, CBAM charges would pass from chemical producers and importers to resin manufacturers, panel mills and eventually furniture companies. The signatories say this would penalise EU production without substantially changing the emissions profile of the upstream chemical industry.<\/p>\n Furniture producers would also face higher costs<\/strong><\/p>\n The dispute extends beyond the panel sector. Particleboard, MDF and other panel products are major inputs for European furniture manufacturing, where margins are often narrow and competition from imported finished goods is strong.<\/p>\n Higher resin costs would make panels manufactured within the EU more expensive. Furniture producers could then face an additional disadvantage against non-EU competitors purchasing panels or producing finished furniture in countries where the same carbon charge does not apply.<\/p>\n This creates the risk of downstream carbon leakage: rather than protecting European manufacturing, the mechanism could encourage a larger share of panel-consuming production to move outside the bloc or increase imports of finished products.<\/p>\n The associations argue that this result would conflict with the EU\u2019s industrial and circular-economy policies. European panel mills consume large quantities of sawmill residues, recovered wood and lower-grade assortments that might otherwise be burned or discarded. They convert these materials into longer-lived products used in furniture, construction, packaging and interior applications.<\/p>\n Weakening the competitiveness of these mills could consequently affect wood recyclers, sawmills, furniture factories and other businesses connected to the same supply chain.<\/p>\n Industry requests safeguard clause<\/strong><\/p>\n The five organisations are asking the European Parliament, Council and Commission to retain or restore Article 27a as an emergency safeguard within the CBAM framework.<\/p>\n The proposed provision would allow the European Commission to intervene if the inclusion of a product led to serious and unexpected market disruption. Possible grounds for action would include sharp price increases, shortages of essential inputs, excessive pressure on downstream manufacturers or a loss of competitiveness that increases the risk of production leaving the EU.<\/p>\n Any intervention should be temporary, targeted and supported by market evidence, according to the joint position. The associations consider such a mechanism necessary as CBAM moves beyond relatively straightforward primary materials into chemicals and more complex industrial supply chains.<\/p>\n Their request is not limited to the two chemicals. They want any future addition of chemical products to be preceded by an assessment covering EU production capacity, import dependence, supply risks and the effects on downstream industries.<\/p>\n Four changes requested<\/strong><\/p>\n The industry groups are seeking four changes to the current approach. They want Article 27a maintained as a workable safeguard, urea excluded where no viable substitute exists, methanol removed from the scope at least until a full assessment has been completed, and future chemical additions subjected to a dedicated downstream analysis.<\/p>\n Their position does not rule out applying CBAM to certain finished or semi-finished products when this is needed to prevent competitive distortions. Furniture fittings or products containing significant quantities of steel or aluminium could still be considered where imported goods otherwise receive an advantage over EU manufacturing.<\/p>\n For the panel and furniture industries, the central question is where the carbon charge is applied. A levy on an imported input that European manufacturers cannot replace may increase their costs while leaving competing finished products from outside the EU relatively more attractive.<\/p>\n The associations are therefore seeking a narrower CBAM design that targets genuine carbon leakage without transferring an unavoidable cost to European panel mills and furniture producers.<\/p>","protected":false},"excerpt":{"rendered":" Five European industry associations are urging EU policymakers to keep urea and methanol outside the Carbon Border Adjustment Mechanism, warning that additional import costs would raise the price of resins, wood-based panels and furniture without giving manufacturers a practical route … Continue reading