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Climate policy under partial global compliance raises concerns regarding carbon leakage. While border carbon adjustment (BCA) measures are a potential remedy, they have also been criticised on various grounds. This paper therefore investigates whether a policy fostering the switch to carbon-free technologies can substitute for BCAs. A reason for the effectiveness of a targeted technology policy is that major leakage prone sectors (such as iron and steel), have two main sources of carbon emissions, combustion of fossil fuels and industrial processes. While combustion emissions can be reduced relatively easy by increasing energy efficiency, reducing process emissions requires a switch to low-carbon production processes, e.g. in steel production by deploying electrolysis based on large-scale solar electricity. We show by means of a multi-regional computable general equilibrium analysis that such a switch in …