The European Union may update the proposal for its Carbon Border Adjustment Mechanism (CBAM), SteelOrbis has learned. Mohammed Chahim, a member of the European Parliament, has prepared a draft report to shorten the transition period, recommending some changes including adding more products to the scope of the mechanism.
According to the first proposal of the European Commission (EC), the CBAM will be effective from 2023 and the transitional period will be implemented until the end of 2025. However, according to the new draft report, the transition period could be implemented until the end of 2024. He stated that the carbon border tax could be fully implemented by the beginning of 2025, instead of the beginning of 2026 as suggested in the initial proposal.
Additionally, the initial proposal includes phasing out the existing free EU Emissions Trading System (ETS) allowances gradually by 2035, but the new draft envisions that the free ETS allowances would end in 2028.
Meanwhile, Mr. Chahim suggested creating a CBAM authority to enforce the levy, compared to the EC’s proposal of each country being responsible for the charge on imports.
The draft report will be discussed in early February, SteelOrbis understands.