The provisional deal was reached in December 2022. The EU Carbon Border Adjustment Mechanism (CBAM) will cover, amongst other items, iron, steel and aluminium. It is designed to be compliant with WTO rules and will apply from 1 October 2023
It is dependent on an agreement on the reform of the EU Emissions Trading System. Parliament and Council will have to formally approve the agreement before the new law can come into force.
The EU Carbon Border Adjustment Mechanism (CBAM) will cover iron and steel, cement, aluminium, fertilisers and electricity, as proposed by the Commission, and extended to hydrogen, indirect emissions under certain conditions, certain precursors as well as to some downstream products such as screws and bolts and similar articles of iron or steel. According to the deal reached, CBAM will be set up to equalise the price of carbon paid for EU products operating under the EU Emissions Trading System (ETS) and the one for imported goods. This will be achieved by obliging companies that import into the EU to purchase so-called CBAM certificates to pay the difference between the carbon price paid in the country of production and the price of carbon allowances in the EU ETS. The new bill will be the first of its kind. It is designed to be in full compliance with World Trade Organisation (WTO) rules. It will apply from 1 October 2023 but with a transition period where the obligations of the importer shall be limited to reporting.
Read more via: Europarl.europa.eu and BNR.nl