The current geopolitical situation has further exposed energy security concerns. The Russian war of aggression against Ukraine shows that accelerating the green transition is not only an environmental imperative but also a geo-strategic necessity, to ensure the EU’s independence in energy supply.
The European Green Deal and the Fit for 55 package, complemented by the REPowerEU Strategy, remain a top priority for the EU. The Carbon Border Adjustment Mechanism (CBAM) will play a key role in the EU’s policy to decarbonise industry in energy intensive sectors, while protecting from the risk of carbon leakage, as it will incentivise an industrial transformation towards greener and more sustainable production processes.
The push for decarbonisation creates new opportunities for industries to increase their competitiveness. The CBAM, as provisionally agreed by the co-legislators at the last political trilogue on 13 December 2022, provides predictability and a balanced approach to the EU industry and to EU consumers in terms of implementation.
The CBAM will be phased in gradually from 2026 to 2034 while the current mechanism to avoid carbon leakage will be phased out accordingly.
The draft CBAM regulation also provides for a number of reports before and after the end of the transitional period to assess in particular the impact of CBAM, the effectiveness of the measure in addressing carbon leakage risks as well as the possibility to extend the scope in terms of sectors and emissions.
Last updated: 13 February 2023