EU tightens carbon border regulation mechanism.

The EU proposes tightening CBAM regulations, expanding the scope to include products that use a lot of steel and aluminum, increasing anti-fraud measures, and supporting businesses in reducing carbon leakage risks.

The European Commission (EC) has just announced a key package of proposals aimed at strengthening the effectiveness of the Carbon Border Adjustment Mechanism (CBAM) – a crucial tool in the bloc's climate and industrial strategy.

A key change is that the scope of the Mechanism will be expanded to include manufactured products that use a lot of steel and aluminum, and anti-fraud regulations will be tightened. Pre-consumer aluminum and steel scrap will also be included in the calculation method, to encourage the use of scrap to reduce emissions.

The new proposal comes after feedback from European industry on the risk of "carbon leaks" and the decline in competitiveness of strategic manufacturing sectors.

Officials also plan to set up a temporary fund to support European businesses during the transition period.

Assessing the overall significance of the policy package, European Commissioner for Climate, Zero Emissions and Green Growth, Wopke Hoekstra, stressed that strengthening CBAM serves simultaneously the goals of competitiveness, climate and strategic autonomy of the EU. According to him, the new measures will help protect climate investments, ensure fair competition and prepare for a phase where CBAM plays a central role in Europe's green and clean transition.

The report assessing the transition period from October 2023 to the end of 2025 shows that CBAM is gradually asserting its role as a driving force for emission reduction on a global scale. After two years of preparation, the CBAM's financial adjustment mechanism will officially be implemented from January 1, 2026, and will gradually increase according to the free allocation reduction schedule within the ETS system, extending to 2034, thereby marking a significant shift in the EU's long-term climate and industrial strategy.

Source:VTV