According to a proposal from the EU Commission, the so-called CO₂ border adjustment (CBAM) should in future be extended to around 180 additional products made of steel and aluminum be collected. These include heavy machinery for factories, car parts, refrigerators, washing machines, components for bridges and agricultural machinery.
The mechanism is intended to offset the costs, European companies through CO₂ certificate trading arise. Who within the EU For example, if you produce steel or aluminum, you must purchase appropriate certificates for the resulting CO₂ emissions. Producers in third countries do not have these costs and can therefore offer their goods cheaper on the European market. The import fee is intended to close this gap by offsetting the costs of CO₂ certificates that would have been incurred to produce the imported goods in the EU.
So far it was CBAMwhich will be introduced gradually from January, is intended for raw materials such as steel, aluminum, cement and electricity. The proposed extension to processed products is intended to prevent companies from circumventing the regulation. The Commission fears that companies could relocate their production of machinery and other goods to countries outside the EU in order to continue purchasing cheaper steel and other raw materials without a CO₂ surcharge and thus displace domestic industry.
The Commission apparently wants compensation funds
The border adjustment is intended to gradually replace the current practice of distributing free CO₂ certificates to industries that compete internationally. This approach is scheduled to expire in the next 15 years. Trading partners such as China, India and South Africa criticize the regulation as an unfair disadvantage for the industries of emerging countries. The EU, on the other hand, emphasizes that the instrument is compliant with the rules of the World Trade Organization (WTO).
In order to ensure the competitiveness of European industry on foreign markets, the EU is apparently also planning a compensation fund. The Reuters news agency has a draft according to which 25 percent of the revenue from the CO₂ border tariff should flow to European manufacturers in the years 2028 to 2029, and revenue of 2.1 billion euros is expected by 2030. However, the support should be linked to the condition that the companies invest in reducing the CO₂ footprint of their own production in return.
The Commission’s proposals must now be negotiated by the European Parliament and the Council of the 27 EU member states. The consultations are likely to take several months.
