Negotiators on the Carbon Border Adjustment Mechanism (CBAM) met in Strasbourg for a fourth interinstitutional meeting (‘trilogue’) on Monday 12 December. While the outcome of the meeting was not known at the time of going to press, the participants were aiming to conclude negotiations on the text.
This was notably the wish of the Chair of the Committee on the Environment, Public Health and Food Safety (ENVI), Pascal Canfin (Renew Europe, French), who repeatedly announced the high probability of an agreement on CBAM on 12 December.
According to a European official, however, the discussions were likely to be very long with several issues still open. On 8 November, during the third trilogue, the participants had already agreed on the governance of the mechanism (see EUROPE 13059/11).
The most difficult points of the text are expected to be put aside and, if possible, resolved later in the week in the negotiations on another text: the one on the revision of the Emissions Trading System (ETS) (see EUROPE 13081/6). The two sensitive issues are the pace and timing of the exit of free allowances under the ETS and a potential continuation of free allocations for some European exporters whose products will be covered by CBAM.
For the first of these two points, however, the date of entry into force of the CBAM is crucial, as it goes hand in hand with the start of the phase-out of free allowances. The European Parliament argued for a start date of January 2027, one year later than the Commission and EU Council wanted. This is to allow more time for companies to adapt, as their free quota will be reduced from this date.
To extend or not to extend the scope of CBAM
CBAM negotiators also had to agree, on Monday 12 December, on whether to extend the scope to include hydrogen, polymers and certain organic chemicals.
A few weeks earlier, the European Commission provided an analysis of this possible extension. In this document seen by EUROPE, it admitted that the inclusion of hydrogen was less complex than that of the other two sectors. The addition of this product to the scope of CBAM was no longer an issue for negotiators in recent days, according to one source.
For Geneviève Pons, Director General of the Europe Jacques Delors think tank, extending the scope of CBAM is not so much a short-term priority: “Either we go further, we gain marginally in programme coverage, but we also gain in complexity. What is important is to get an effective system in place, make it work and then expand it”, she told EUROPE.
In a position paper on CBAM in 2020, Europe Jacques Delors had suggested including only two sectors in the scope in the first instance: cement and electricity production.
EUROPE will come back on the outcome of the trilogue. (Original version in French by Léa Marchal)