10 February 2023


On 8 and 9 February, the European Parliament’s ENVI Committee as well as the Council’s Committee of Permanent Representatives (COREPER) approved the provisional agreements reached in trilogues in the ‘Fit for 55’ package, including the much-debated regulations on the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM).

The agreed text confirms the inclusion of maritime emissions into the EU ETS from 2024 and the creation of a new, separate emissions trading system (ETS 2) for the buildings and road transport sector which will be launched in 2027. CLECAT welcomes the agreement as essential to decarbonise road and maritime transport, but regrets that the text falls short of earmarking the revenues towards the transport sector in order to decarbonise its activities.

On ETS for aviation, the deal reached by the Parliament and Council will ensure that the EU ETS will apply for intra-European flights (including departing flights to the United Kingdom and Switzerland), while CORSIA will apply to for extra-European flights to and from third countries participating in CORSIA ('clean cut') from 2022 to 2027. The co-legislators also agreed to gradually phase out free emission allowances for the aviation sector, with full auctioning from 2026.

Members also approved the agreed text of the carbon border adjustment mechanism (CBAM). CBAM is designed to function in parallel with the EU’s Emissions Trading System (EU ETS), to mirror and complement its functioning on imported goods. It will gradually replace the existing EU mechanisms to address the risk of carbon leakage, in particular the free allocation of EU ETS allowances. CBAM will initially cover a number of specific products in some of the most carbon-intensive sectors: iron and steel, cement, fertilisers, aluminium, electricity and hydrogen, as well as some precursors and a limited number of downstream products. CBAM will have a direct impact on customs representatives who may carry out CBAM-related tasks and become CBAM declarants when indirect representation applies.

The agreed text in trilogues still needs to be formally approved by the EP’s Plenary, possibly in March/April, followed by the formal approval in Council before their publication in the Official Journal of the EU.

Source: Swedish Presidency of the Council, ENVI Committee