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[BUSINESS] · EU · 13 sources

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European Parliament votes to expand CBAM carbon tax scope

The European Parliament has adopted its position to expand the scope of the Carbon Border Adjustment Mechanism (CBAM), moving beyond basic materials like steel, aluminum, cement, fertilizers, electricity, and hydrogen to include downstream products. Proposed additions include washing machines, automobile parts, fasteners, wire, and springs.

In a significant policy shift, lawmakers voted to remove the 'emergency brake' clause, which would have allowed for temporary exemptions during unforeseen price spikes. Instead, the Parliament proposed using CBAM revenues to compensate industries if the mechanism causes significant price increases. To maintain grid stability, an exemption will be introduced for electricity flows from non-EU countries used by grid operators.

The Parliament also approved amendments to protect outermost regions, providing exemptions to prevent excessive costs on essential imports due to their geographic isolation. Additionally, the Parliament supported the establishment of a temporary decarbonisation fund (TDF) to assist EU producers in competitive export markets. These developments set the stage for upcoming negotiations between the Parliament and the Council to finalize the regulation.

Entities

Carbon Border Adjustment Mechanism · European Commission · European Parliament · European Union · Mohammed Chahim · Pascal Canfin · S&D Group · WV Stahl · Younous Omarjee

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1 day ago