The MEP leading the EU Parliament’s CBAM legal report (Mohammed Chahim) has published a draft calling for hydrogen, organic chemicals and polymers to be included in the EU’s proposed Carbon Border Adjustment Mechanism (CBAM).
The currently proposed CBAM covers the cement, steel, aluminium, power and fertiliser sectors. Chahim is also calling for free allowances to end in 2028 (vs the current 2036). To achieve this, Chahim has proposed an acceleration of allowance reductions – 90% in 2025, 70% in 2026, 40% in 2027 and zero in 2028. The MEP claims that current targets are not in line with the EC’s 2030 climate objectives. Furthermore, he has called for CBAM implementation to be brought forward a year to 2025 (post the transitional period which is due to start in 2023). Chahim also wants to include indirect emissions, e.g. electricity used to smelt steel or aluminium. In addition, he has suggested the creation of a single EU CBAM authority rather than decentralised CBAM authorities in each of the 27 member states.
While some of the proposals have been supported by more left-leaning parties, the centre-right parties are opposed with many, in particular, wanting to retain free allowances. Some industry groups have also opposed some of the initiatives, e.g. the European non-ferrous association, Eurometaux, which is calling for the exclusion of indirect emissions, continuation of free allowances and stronger measures to prevent third-country firms exporting ‘green’ products to the EU but selling CO2-intensive goods domestically. Separately, some NGOs have also called for a portion of CBAM revenues to be awarded to least-developed countries. The EU Parliament’s environment committee is set to vote on the draft legal proposals on 28 February.
Adapted from an article in Argus