The European Parliament's International Trade Committee has published a draft opinion proposing amendments to the Carbon Border Adjustment Mechanism (CBAM), aimed at expanding its scope to refined products and strengthening anti-circumvention measures.
The proposal aims to ensure consistent carbon cost recovery across industrial value chains as the EU phases out free allowances under the Trading System emissions.
Focus on preventing carbon leakage
According to the draft, phasing out free ETS allowances, combined with the implementation of CBAM, could shift the risks of carbon leakage from upstream sectors such as steel to downstream products flow.
Therefore, expanding the scope of CBAM to include these goods is considered necessary to maintain the effectiveness of the mechanism and ensure consistent application of carbon costs throughout the value chain.
Recognition of carbon pricing in third countries
The Committee also proposed recognize dual carbon pricing systems in third countries. Under such arrangements, exporters subject to carbon surcharges in their domestic markets can recognize these costs as the “carbon price effectively paid,” thereby reducing their CBAM obligations.
This approach is intended to encourage global adoption of carbon pricing mechanisms and support decarbonization efforts in sectors including steel industry.
Development support measures
