The European Parliament has given the green light this Tuesday to the expansion of the Carbon Border Adjustment Mechanism (CBAM, for its acronym in English) of the European Union, so that it covers a greater number of goods made from steel and aluminum, including screws, wires, springs, and household utensils. At the same time, the institution proposes to tighten the rules to close the loopholes that allow some importers to evade the payment of this climate tariff.
The plenary has set its position on the review of this instrument with 464 favorable votes, 50 against, and 159 abstentions, thus supporting the initiative of the European Commission to go beyond basic raw materials and to expand the initial list of products presented by Brussels.
Among the modifications introduced, the MEPs reduce the threshold from which small alterations in a product can be considered a strategy to evade the mechanism —which seeks to equalize the carbon cost of goods produced in the EU with that of imports— although they limit this measure only to agreements specifically designed to avoid the CBAM and not to usual business decisions aimed at cutting costs.
The Eurochamber also proposes that the Commission may apply the default emission values corresponding to the actual country of origin of a good when it detects a repeated pattern of non-compliance or evasion of the rules.
Against the initial approach of the community executive, the MEPs discard the option of temporarily excluding certain products from the mechanism in the face of episodes of sharp price increases and suggest, instead, that the revenues generated by the CBAM for those goods can be temporarily redirected to the most affected sectors.
The position approved by the Parliament also incorporates simplified notification procedures for less developed countries and a technical assistance system, as well as an exemption for electricity flows from third countries that network managers need to ensure the stability of the electrical system.
Support from 2027 for the decarbonization of European companies
In parallel, the European Parliament has supported with 433 votes in favor, 97 against, and 146 abstentions its position on the temporary decarbonization fund linked to the CBAM, designed to support European producers competing in international markets against rivals that do not face an equivalent price for their carbon emissions.
MEPs argue that these aids can be granted between 2027 and 2029, bringing forward by one year their entry into force compared to 2028, the date that appeared in the original proposal from the European Commission.
Furthermore, the Eurochamber proposes to expand the scope of the fund to manufacturers of fertilizers and to companies that use them and bear higher carbon-related costs, considering fertilizers a key input for food security, such as urea, ammonium nitrate, and ammonium sulfate.
The Parliament also demands that all companies using products subject to the CBAM as raw materials in their production processes be able to access these aids and proposes that unused resources be allocated to the EU's international climate financing commitments under the Paris Agreement, instead of being returned to the member states, as suggested by Brussels.
The two positions adopted by the plenary now allow the Eurochamber to open negotiations with the governments of the member states with the aim of agreeing on the final text of these reforms.