Deal on Carbon Border Adjustment Mechanism: historic agreement for the climate and Europe's competitiveness

Author: Miguel Antony M Chevalier



Renew Europe welcomes last night’s political agreement reached by the European Parliament and the EU Council on a new Carbon Border Adjustment Mechanism in the EU.

Meeting the EU's updated 2030 climate targets and the long-term goal of climate neutrality by 2050 remains a priority for Renew Europe. To ensure that all polluters – wherever their production is located – pay equally for their emissions, it is important to put a fair price for the CO2 emissions embedded in the products that are brought into the EU.

By applying the same carbon price on greenhouse gas emissions from the production of imported goods as in the EU Emission Trading System (ETS), the CBAM will extend environmental standards to all products sold on the EU market. At the same time, we create a level playing field and avoid carbon leakage from businesses relocating their activities to less climate friendly countries, ensuring competitiveness and job creation in clean industries in the EU.

The agreement reached by the European Parliament and the EU Council provides for a robust and WTO-compatible mechanism and we will work to strengthen and expand it in the coming years. With a strong ETS and CBAM, Europe is helping to advance effective carbon pricing worldwide and new climate multilateralism.

MEP Nicolae Ștefănuță (Uniunea Salvați România, Romania), Renew Europe shadow rapporteur says after the final trilogue meeting:

“I am happy that we have reached an agreement; the EU takes important steps now to attain our objectives – reducing CO2 emissions and achieving climate neutrality by 2050. With this deal, we set another world first: the EU is the first trade area in the world to put a carbon price on its imports. CBAM is the EU’s game changer for sustainable trade and will have positive effect in our aim to achieve the Paris Agreement target.”

MEP Pascal Canfin (L’Europe Ensemble, France) chair of ENVI committee says:

“For the first time, we are going to ensure fair treatment between our companies, which pay a carbon price in Europe, and their foreign competitors, which do not. This is a major step that will allow us to do more for the climate while protecting our companies and our jobs. It is a result of which we can be proud since the Commission's initial proposal has been strengthened. The scope has been extended to hydrogen. We have also provided for the future integration of processed products, such as cars. The message to our industries is clear: there is no need to relocate because we have taken the necessary measures to avoid unfair competition and carbon leakage. After the agreement on the deforestation law and with this agreement on the carbon border adjustment mechanism, we are further connecting the climate and trade rules to make Europe a sovereign green power."



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