Agreement on the Carbon Border Adjustment Mechanism (CBAM) - copyright Petra Wessman - 2018
Photo: copyright Petra Wessman - 2018

- By Luc Depré

Agreement on the Carbon Border Adjustment Mechanism (CBAM)

The 13th of december 2022, Negotiators of the Council and the European Parliament reached an agreement of a provisional and conditional nature on the Carbon Border Adjustment Mechanism (CBAM).

The agreement needs to be confirmed by ambassadors of the EU member states, and by the European Parliament, and adopted by both institutions before it is final.

Climate change is a global problem that needs global solutions

CBAM will ensure that European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe. It also aims to encourage industry outside the EU and our international partners to take steps in the same direction. In other words, the CBAM will equalise the price of carbon between domestic products and imports and ensure that the EU’s climate objectives are not undermined by production relocating to countries with less ambitious policies.

A simplified CBAM system, where importers will have to report emissions embedded in their goods without paying a financial adjustment, will apply as from 2023 for selected products with the objective of facilitating a smooth roll out and to facilitate dialogue with third countries.

Once the definitive system becomes fully operational in 2026, EU importers will have to declare annually the quantity of goods and the amount of embedded emissions in the total goods they imported into the EU in the preceding year, and surrender the corresponding amount of CBAM certificates.

Associated areas of specialisation: Environment, Public economics and finance


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