In a letter published on Wednesday 11 February, a number of players representing the hydrogen, ammonia, steel and fertiliser industries, including HydrogenEurope, urged the European Commission to get rid of Article 27a of the proposed revision of the Carbon Border Adjustment Mechanism (CBAM) regulation, presented on 17 December (see EUROPE 13775/10).
This new article allows certain imported products to temporarily escape the CBAM regulation (imposing a price on the carbon of products imported into the EU), in the event of “serious harm to the Union’s internal market”.
It took the European Commission no less than three weeks to consider using it, in response to criticism from the farming industry. On 8 January, it announced a possible proposal for a temporary suspension of CBAM for fertilisers, retroactive to 1 January 2026 (see EUROPE 13791/11, 13781/4).
In their letter, however, the signatories are critical of the lack of predictability for the decarbonisation of industrial processes, including fertilisers, steel and other sectors that are difficult to decarbonise.
“The proposed ‘emergency brake’ has had an immediate tangible and materially disruptive effect on the fertiliser markets. Buyers have delayed contract negotiations, sellers hesitated to price CBAM-related costs, and forward markets have effectively been stalled”.
They also regret that by opening this Pandora’s box, the other major economies will be discouraged from establishing their own carbon pricing systems, “which was an explicit objective of the CBAM”.
To see the letter: https://aeur.eu/f/kol (Original version in French by Pauline Denys)