25 May 2022

ENVI COMMITTEE ADOPTS REPORT ON CBAM

On 17 May, the EP ENVI Committee adopted their report on the proposed regulation establishing a Carbon Border Adjustment Mechanism (CBAM). The ENVI Committee calls for a broader scope and faster implementation of the CBAM to raise global climate ambition. The report is scheduled for a vote at the plenary session 6-9 June after which Parliament will be ready to start negotiations with the Council.

MEPs want CBAM to cover aluminium, hydrogen, polymers and organic chemicals in addition to the products proposed by the Commission (iron and steel, refineries, cement, organic basic chemicals and fertilisers). MEPs also want to extend CBAM to include indirect emissions, i.e. emissions deriving from the electricity used by manufacturers. The CBAM would apply from 1 January 2023 with a transitional period until the end of 2024 and MEPs say it must be fully implemented for all sectors of the EU Emissions Trading System (ETS) by 2030 - 5 years earlier than proposed by the Commission. MEPs also want the revenues generated by the sale of CBAM certificates to go the EU budget.

Concerning the governance of CBAM, MEPs believe there should be one centralised EU CBAM authority, rather than having 27 competent authorities. It is believed to be more efficient, transparent and cost effective, and help to combat forum shopping from importers. Notedly, MEPs support a system on sanctions including financial penalties, accompanied by an obligation for Member States to impose administrative or criminal charges in cases of non-compliance.

CLECAT has stressed the need to secure a realistic timeline for smooth CBAM transition. EU customs brokers, who may be involved in managing CBAM obligations, must be provided with sufficient time to prepare for the new tasks and associated responsibilities, which will imply a great amount of administrative burden and will require specific knowledge. Additionally, the system of sanctions provided in the ENVI report will lead to diverging practices among Member States which will ultimately distort of the level playing field in the Single Market. CLECAT therefore calls on MEPs to establish a system of proportionate and uniform system of sanctions.

Source: European Parliament