A majority of Finance Ministers of the Member States of the European Union agreed to support extending the scope of the Carbon Border Adjustment Mechanism (CBAM), at the Economic and Financial Affairs Council meeting on Friday 12 June in Luxembourg (see other news items). Slovakia, Romania, Latvia and Estonia did not support the compromise proposal from the Cyprus Presidency, which did not prevent the Council from reaching a political agreement in principle.
The Council is therefore ready to negotiate the text with the European Parliament. An agreement on this text is hoped for by the end of 2026, although some issues remain unresolved.
An exemption for the outermost regions. A change was introduced in the latest compromise text adopted by the Council. This concerns an exemption from the CBAM for the outermost regions, limited to cement and construction materials and temporary in nature, which would apply only in exceptional circumstances – natural disasters, for example.
Portugal supported this addition, but suggested that direct financial assistance to the outermost regions could also have been granted to mitigate the effects of the CBAM. Sweden, for its part, considers that there are no climate grounds for this exemption, but it nevertheless supported the compromise text.
Concerns ahead of the negotiations with Parliament. Some Member States expressed concerns about certain provisions of the text and wish to see them raised in the negotiations with the European Parliament.
This is the case, for example, for Germany, which wants implementation to involve as little bureaucracy as possible, particularly as regards the framework for circumvention scenarios, and which recalled the objective of the CBAM to combat carbon leakage effectively. This latter point was also raised by France and Romania.
The Commission should make fresh proposals on the risks of relocation.
Concern about the impact on fertiliser prices was also raised by several Member States, including Romania, Latvia and Greece.
Italy wants to include more downstream products, that is to say finished products containing large amounts of steel and aluminium, whereas Finland is calling for caution in the event that other products are added.
Reasons for the abstentions. Slovakia said it was abstaining because it wants the scope to be broadened still further, so as to include post-consumer aluminium.
Like Estonia and Romania, it expressed reservations about Article 27a, which makes it possible to change the scope by means of a delegated act if the prices of certain products rise by more than 50%. For Slovakia, the procedure is not appropriate. For Romania and Latvia, it is the threshold that should be changed: 20% would be a threshold better able to address the risks of shortages and price increases.
Finland and the Netherlands said they viewed this temporary derogation “with a critical eye”.
The political agreement in principle: https://aeur.eu/f/mbx (Original version in French by Nadège Delépine)