Mohammed Chahim, the MEP leading the legal report on the EU Parliament’s Carbon Border Adjustment Mechanism (CBAM), has recently released a draft urging the incorporation of hydrogen, organic chemicals, and polymers into the proposed mechanism. The current CBAM framework focuses on sectors such as cement, steel, aluminium, power, and fertilisers. Chahim proposes the elimination of free allowances by 2028, a significant advancement compared to the current plan that extends until 2036. To achieve this, he suggests accelerating the reduction of allowances, reaching 90% in 2025, 70% in 2026, 40% in 2027, and ultimately zero in 2028. Chahim argues that the existing targets fail to align with the European Commission’s 2030 climate objectives. Additionally, he advocates for the implementation of CBAM to be moved forward to 2025, following the transitional period scheduled to begin in 2023. Chahim also emphasizes the inclusion of indirect emissions, such as electricity used in steel or aluminium smelting, and proposes the establishment of a unified EU CBAM authority rather than separate authorities in each of the 27 member states.
While some left-leaning parties support these proposals, center-right parties, particularly those seeking to retain free allowances, oppose them. Certain industry groups, such as the European non-ferrous association Eurometaux, are also critical of specific initiatives. Eurometaux calls for the exclusion of indirect emissions, the continuation of free allowances, and stronger measures to prevent third-country firms from exporting high-CO2 goods while selling “green” products domestically. Additionally, some NGOs have suggested allocating a portion of CBAM revenues to least-developed countries. The EU Parliament’s environment committee is scheduled to vote on the draft legal proposals on 28 February.
