The MEPs agree with the Commission’s proposal to extend the scope of CBAM beyond basic materials to a long list of downstream products – finished steel and aluminium goods such as fasteners, wire, springs and household articles – but insist it must be based on transparent, quantitative methodologies. They also added an exemption for electricity flows from non-EU countries used by grid operators to keep networks stable.
Closing loopholes
On anti-circumvention rules, the MEPs clarified that the practice of “slightly modifying” goods must also cover slight processing and tightened the rule so it targets only arrangements set up purely to dodge CBAM, and not normal business decisions to lower a company’s costs. They also empowered the Commission to apply the true country of origin’s default values where a pattern of circumvention is found. They deleted the Commission’s proposed safeguard that would have allowed goods to be removed from the scope in the event of price shocks.
The committee also wants new rules for online sales to close an online imports loophole. It recommends a single weight-based limit be applied to a seller’s shipments as a whole, rather than parcel by parcel, with new reporting duties, and retroactive liability for shipments that are split to stay under the threshold.
Finally, the MEPs propose simplified reporting for least-developed countries and a technical assistance framework, but removed the Commission’s option to count Paris Agreement Article 6 carbon credits against CBAM obligations, since this issue is likely to be discussed in the context of the upcoming revision of the EU emissions trading system (ETS).
Temporary decarbonisation fund
The Environment Committee also adopted their position on the related temporary decarbonisation fund (TDF) to protect EU producers on export markets, by 59 votes to 16, with 6 abstentions.
The MEPs want financial support from the TDF to run from 2027 to 2029 and not only from 2028 as proposed by the Commission. As fertilisers are a strategic input for food security, they also want to open the fund to fertiliser producers and downstream users facing higher carbon-related input costs, with products such as urea, ammonium nitrate and ammonium sulphate added to the list of eligible goods.
Finally, all downstream operators – firms that use CBAM-covered goods as inputs in their production – should be eligible for support from the fund, while leftover revenue could be redirected to the EU’s international climate finance commitments under the Paris Agreement instead of being returned to member states, as the Commission proposed.
Source: European Parliament
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