The European Parliament's Environment Committee (ENVI) has supported changes to the cross-border Carbon regulation (CBAM) mechanism proposed by the EU. This is reported in the ENVI press release.
In particular, a long list of processed products, including finished steel and aluminum products, has been added to the CBAM mechanism, subject to the introduction of transparent quantitative methodologies. At the same time, an exception has been added for electricity flows from non-EU countries used by grid operators to maintain network stability.
In addition, stricter rules have been introduced to combat tax evasion, which should not apply to ordinary business decisions aimed at reducing company costs. If a tendency to evade payment of duties is detected, it is allowed to apply default measures for the country of origin of the goods. At the same time, the clause that allowed goods to be excluded from the scope of the cross-border carbon regulation mechanism in the event of price shocks has been replaced by a mechanism for temporarily redirecting revenues from the relevant goods to the affected industries.
The Committee intends to introduce new rules for online sales in order to close the possibility of importing via the Internet and recommends setting a single weight limit for all shipments in total.
The Committee proposes to simplify reporting for least developed countries and to create a system of technical assistance, but to exclude the possibility of using carbon credits against obligations under cross-border carbon regulation.
The Committee also decided to establish an interim Decarbonization Fund (TDF) to protect EU producers in export markets with extended financial support from 2027 to 2029 and intends to create a fund for fertilizer producers and end users facing higher costs associated with carbon emissions, taking into account the inclusion of carbamide, nitrate and ammonium sulfate.
In addition, the committee believes that all companies using goods subject to the cross-border carbon mechanism as raw materials for production should be eligible for support from the fund, and the remaining funds should be used to fulfill the EU's international obligations to finance climate change, rather than returning to member states at the suggestion of the EC..
According to the representative of the European Parliament, "the ENVI decision makes cross-border carbon regulation more efficient, eliminates loopholes to circumvent the rules and protects European industry in the process of decarbonization."
