Brussels, 13 December 2022  

On the 13th of December, negotiators of the European Parliament and the Council reached an agreement of a provisional and conditional nature on the Carbon Border Adjustment Mechanism (CBAM).

CBAM will initially cover products in the following carbon-intensive sectors:  iron and steel, cement, fertilisers, aluminium, as well as electricity and hydrogen.

CBAM will begin to operate from October 2023 onwards, but this will be a simplified CBAM where only reporting obligations apply. CBAM should be phased in gradually, in parallel to the phasing out of free allowances under the EU Emissions Trading System (EU ETS).

However, the exact details and timelines in this regard are connected the outcome of the EU ETS negotiations, where the phasing out of free allowances for CBAM sectors is currently under discussion. According to the Presidency of the Council, further work is also required on measures to prevent carbon leakage on exports.

Source: Council of the European Union