163 Amendments of Adam JARUBAS related to 2021/0214(COD)
Amendment 43 #
Proposal for a regulation
Chapter III – title
Chapter III – title
III Competent authoritiesBAM Authority (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 44 #
Proposal for a regulation
Article 11 – title
Article 11 – title
Amendment 45 #
Proposal for a regulation
Article 11 – paragraph 1
Article 11 – paragraph 1
Amendment 46 #
Proposal for a regulation
Article 11 – paragraph 2
Article 11 – paragraph 2
Amendment 51 #
Proposal for a regulation
Article 19 a (new)
Article 19 a (new)
Article 19 a Revenues The revenues generated by the sale of CBAM certificates shall constitute internal assigned revenue in accordance with Article 21(4) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council. They shall be assigned to cover the costs of the operation and maintenance of the CBAM Authority. Any revenue remaining after covering these costs shall be assigned to the Union budget.
Amendment 79 #
Proposal for a regulation
Recital 8
Recital 8
(8) As long as a significant number of the Union’s international partners have policy approaches that do not result indo not achieve the same level of climate ambition, there is a risk of carbon leakage, which would undermine the Union’s competitiveness on global markets. Carbon leakage occurs if, for reasons of costs related to climate policies, businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less GHG emissions intensive products-intensive products on the internal market, as well as export markets, or investment into such sectors and subsectors would predominantly flow to such countries and not the Union. That cwould lead to an increase in their total emissions globally, thus jeopardising the reduction of GHG emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °C above pre- industrial levels.
Amendment 100 #
Proposal for a regulation
Recital 9
Recital 9
(9) The initiative for a carbon border adjustment mechanism (‘CBAM’) is a part of the ‘Fit for 55 Package’. That mechanism is to serve as an essential element of the EU toolbox to meet the objective of a climate-neutral Union by 2050 in line with the Paris Agreement by addressing risks ofpreventing carbon leakage resulting from the increased Union climate ambition.
Amendment 109 #
Proposal for a regulation
Recital 10
Recital 10
(10) Existing mechanisms to address the risk of carbon leakage in sectors or sub- sectors at risk of carbon leakage are the transitional free allocation of EU ETS allowances and financial measures to compensate for indirect emission costs incurred from GHG emission costs passed on in electricity prices respectively laid down in Articles 10a(6) and 10b of Directive 2003/87/EC. However, free allocation under the EU ETS weakens the price signal that the system provides for the installations receiving it compared to full auctioning and thus affects the incentives for investment into further abatement of emissions. Free allocation at the level of best performers has been an adequate policy instrument for certain industrial sectors to address the risk of carbon leakage in the absence of a fair level playing field.
Amendment 117 #
Proposal for a regulation
Recital 11
Recital 11
(11) The CBAM seeks tointends to complement and progressively replace these existing mechanisms by addressing the risk of carbon leakage in a different way, namely by ensuring equivalent carbon pricing for imports and domestic products. To ensure a gradual transition from the current system of free allowances to the CBAM, the CBAM should be progressively phased in while free allowances in sectors covered by the CBAM are phased out. The combined and transitional application of EU ETS allowances allocated free of charge and of the CBAMshould be phased out only after a comprehensive transitional period between 2026 and 2030 and once the CBAM has proven to be efficient, fit for purpose, operational and tested to mitigate the risk of carbon leakage. The combined application of EU ETS allowances allocated free of charge and of the CBAM is needed to allow producers, importers and traders to adjust to the new regime and to assess the effective implementation of the CBAM but should in no case result in more favourable treatment for Union goods compared to goods imported into the customs territory of the Union as continuous trade with third countries are essential for the Union and its diversified supply chains.
Amendment 134 #
Proposal for a regulation
Recital 12
Recital 12
(12) While the objective of the CBAM is to prevent the risk of carbon leakage, this Regulation would also encourage the use of more GHG emissions-efficient technologies by producers from third countries, so that less emissions per unit of output are generated. The CBAM hence might be an effective measure to lower emissions in third countries while ensuring European industry competitiveness. Reducing emissions in the Union as well as in third countries is an effective way to reduce the risk of carbon leakage. The CBAM should be seen as a step towards global pricing on carbon emissions which would further reduce the risk of carbon leakage globally.
Amendment 142 #
Proposal for a regulation
Recital 12 a (new)
Recital 12 a (new)
(12 a) While the surrendering of CBAM certificates for EU importers addresses the risk of carbon leakage on the EU market, it is essential that the CBAM would also seek to reduce the possibility of European low-carbon exports being replaced by carbon-intensive items on third country markets or by goods that are not subject to equivalent climate policy and carbon costs, undermining the goal of lowering global emissions. It is therefore necessary to continue addressing the risk of carbon leakage associated with European exports to third countries that have not yet limited or priced GHG emissions at the same levels as the EU.
Amendment 147 #
Proposal for a regulation
Recital 8
Recital 8
(8) As long as a significant number of the Union’s international partners have policy approaches that do not result indo not achieve the same level of climate ambition, there is a risk of carbon leakage, which would undermine the Union’s competitiveness on global markets. Carbon leakage occurs if, for reasons of costs related to climate policies, businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less GHG emissions intensive products-intensive products on the internal market, as well as export markets, or investment into such sectors and subsectors would predominantly flow to such countries and not the Union. That cwould lead to an increase in their total emissions globally, thus jeopardising the reduction of GHG emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °C above pre- industrial levels.
Amendment 149 #
Proposal for a regulation
Recital 13
Recital 13
(13) As an instrument to prevent carbon leakage and reduce GHG emissions the CBAM should ensure that imported products are subject to a regulatory system that applies carbon costs equivalent to the ones that otherwise would have been borne under the EU ETS. The CBAM is a climate measure which should prevent the risk of carbon leakage and support the Union’s increased ambition on climate mitigation, while ensuring WTO compatibility and industrial competitiveness.
Amendment 151 #
Proposal for a regulation
Recital 13 a (new)
Recital 13 a (new)
(13 a) As CBAM is a mechanism that addresses the risk of carbon leakage on the EU market for EU imports, it is essential to avoid the risk that EU exports are replaced by more carbon intensive goods on the global market. Hence, the Commission shall analyse its implementation and effectiveness throughout the administrative transitional period and shall by the end of this period submit a report to the European Parliament and Council that specifies the carbon leakage risk on export markets accompanied with a proposal preventing the carbon leakage risk on export markets with safeguards of products intended for exports, such as export rebates.
Amendment 162 #
Proposal for a regulation
Recital 9
Recital 9
(9) The initiative for a carbon border adjustment mechanism (‘CBAM’) is a part of the ‘Fit for 55 Package’. That mechanism is to serve as an essential element of the EU toolbox to meet the objective of a climate-neutral Union by 2050 in line with the Paris Agreement by addressing risks ofpreventing carbon leakage resulting from the increased Union climate ambition.
Amendment 166 #
Proposal for a regulation
Recital 17
Recital 17
(17) The GHG emissions to be regulated by the CBAM should correspond to those GHG emissions covered by Annex I to the EU ETS in Directive 2003/87/EC, namely carbon dioxide (‘CO2’) as well as, where relevant, nitrous oxide (‘N2O’) and perfluorocarbons (‘PFCs’). The CBAM should initially apply to direct emissions of those GHG from the production of goods up to the time of import into the customs territory of the Union, and after the end of athe administrative transitional period and upon further assessment on the impact on carbon leakage for energy-intensive sectors with a withdrawal of EU ETS compensation, as well to indirect emissions, mirroring the scope of the EU ETS.
Amendment 173 #
Proposal for a regulation
Recital 19
Recital 19
(19) However, while the EU ETS sets an absolute cap on the GHG emissions from the activities under its scope and allows tradability of allowances (so called ‘cap and trade system’), the CBAM shouldmust not establish quantitative limits to import, so as to ensure that trade flows are not restricted or disrupted. Moreover, while the EU ETS applies to installations based in the Union, the CBAM should be applied to certain goods imported into the customs territory of the Union to ensure a level playing field and prevent the risk of carbon leakage while ensuring compatibility with WTO.
Amendment 174 #
Proposal for a regulation
Recital 10
Recital 10
(10) Existing mechanisms to address the risk of carbon leakage in sectors or sub- sectors at risk of carbon leakage are the transitional free allocation of EU ETS allowances and financial measures to compensate for indirect emission costs incurred from GHG emission costs passed on in electricity prices respectively laid down in Articles 10a(6) and 10b of Directive 2003/87/EC. However, free allocation under the EU ETS weakens the price signal that the system provides for the installations receiving it compared to full auctioning and thus affects the incentives for investment into further abatement of emissions. Free allocation at the level of best performers has been an adequate policy instrument for certain industrial sectors to address the risk of carbon leakage in the absence of a fair level playing field.
Amendment 189 #
Proposal for a regulation
Recital 24
Recital 24
(24) In terms of sanctions, Member States should apply penalties to infringements or circumvention practises of this Regulation and ensure that they are implemented. The amount of those penalties should be identical to penalties currently applied within the Union in case of infringement of EU ETS according to Article 16(3) and (4) of Directive 2003/87/EC.
Amendment 193 #
Proposal for a regulation
Recital 28
Recital 28
(28) Whilst the ultimate objective of the CBAM is a broader product coverage, it would beis prudent to start with a selected number of sectors with relatively homogeneous products where there is a risk of carbon leakage. The Commission should consider to further extend the scope of included goods, when CBAM is proven efficient to reduce carbon leakage for the sectors included in Annex I of this Regulation. A proposal of the inclusion of finished goods shall be presented by the Commission before the comprehensive transitional period. Union sectors deemed at risk of carbon leakage are listed in Commission Delegated Decision 2019/70842 . __________________ 42Commission Delegated Decision (EU) 2019/708 of 15 February 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council concerning the determination of sectors and subsectors deemed at risk of carbon leakage for the period 2021 to 2030 (OJ L 120, 8.5.2019, p. 2).
Amendment 200 #
Proposal for a regulation
Recital 29
Recital 29
(29) The goods under this Regulation should be selected after a careful analysis of their relevance in terms of cumulated GHG emissions and risk of carbon leakage in the corresponding EU ETS sectors while limiting complexity and administrative burden for European industry, affected authorities, companies and SMEs. In particular, the actual selection should take into account basic materials and basic products covered by the EU ETS with the objective of ensuring that imports of energy intensive products into the Union are on equal footing with EU products in terms of EU ETS carbon pricing, and to mitigate risks of carbon leakage. Other relevant criteria to narrow the selection should be: firstly, relevance of sectors in terms of emissions, namely whether the sector is one of the largest aggregate emitters of GHG emissions; secondly, sector’s exposure to significant risk of carbon leakage, as defined pursuant to Directive 2003/87/EC; thirdly, the need to balance broad coverage in terms of GHG emissions while limiting complexity and administrative effort.
Amendment 202 #
Proposal for a regulation
Recital 11
Recital 11
(11) The CBAM seeks tointends to complement and progressively replace these existing mechanisms by addressing the risk of carbon leakage in a different way, namely by ensuring equivalent carbon pricing for imports and domestic products. To ensure a gradual transition from the current system of free allowances to the CBAM, the CBAM should be progressively phased in while free allowances in sectors covered by the CBAM are phased out. The combined and transitional application of EU ETS allowances allocated free of charge and of the CBAMshould be phased out only after a comprehensive transitional period between 2026 and 2030 and once the CBAM has proven to be efficient, fit for purpose, operational and tested to mitigate the risk of carbon leakage. The combined application of EU ETS allowances allocated free of charge and of the CBAM is needed to allow producers, importers and traders to adjust to the new regime and to assess the effective implementation of the CBAM but should in no case result in more favourable treatment for Union goods compared to goods imported into the customs territory of the Union as continuous trade with third countries are essential for the Union and its diversified supply chains.
Amendment 221 #
Proposal for a regulation
Recital 38
Recital 38
(38) As importers of goods covered by this Regulation should not have to fulfil their CBAM obligations under this Regulation at the time of importation, specific administrative measures should be applied to ensure that the obligations are fulfilled at a later stage. Therefore, importers should only be entitled to import CBAM goods after they have been granted an authorisation by competent authorities responsible for the application of this Regulation.CBAM Authority (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 236 #
Proposal for a regulation
Recital 46
Recital 46
(46) To avoid risks of circumvention and improve the traceability of actual CO2 emissions from import of electricity and its use in goods, the calculation of actual emissions should only be permitted through a number of strict conditions. In particular, it should be necessary to demonstrate a firm nomination of the allocated interconnection capacity and that there is a direct contractual relation between the purchaser and the producer of the renewable and low carbon electricity, or between the purchaser and the producer of electricity having lower than default value emissions. .
Amendment 238 #
Proposal for a regulation
Recital 46 a (new)
Recital 46 a (new)
(46 a) To reduce the risk of carbon leakage as well as to ensure a level playing field for European industry, all practices of circumvention shall be prohibited. The Commission shall evaluate the risk of circumvention practices, especially the likelihood of modified trade patterns towards downstream products, as well as resource shuffling, cost absorption, manipulation of emissions data, wrongful labelling of goods and slight modifications of the product so as to import a product under a different customs code of all sectors included in Annex I of this Regulation. The Commission shall be empowered to adopt delegated acts to strengthen anti- circumvention measures when appropriate.
Amendment 239 #
Proposal for a regulation
Recital 12
Recital 12
(12) While the objective of the CBAM is to prevent the risk of carbon leakage, this Regulation would also encourage the use of more GHG emissions-efficient technologies by producers from third countries, so that less emissions per unit of output are generated. For that reason the CBAM could be an effective measure to lower emissions in third countries while ensuring European industry competitiveness. Reducing emissions in the Union as well as in third countries is an effective way to reduce the risk of carbon leakage. The CBAM should be seen as a step towards global pricing on carbon emissions which would further reduce the risk of carbon leakage globally.
Amendment 243 #
Proposal for a regulation
Recital 48
Recital 48
(48) Integration of third countries into the Union electricity market is an important drive for those countries to accelerate their transition to energy systems with high shares of renewable energies. Market coupling for electricity, as set out in Commission Regulation (EU) 2015/122246 , enables third countries to better integrate electricity from renewable and low carbon energies into the electricity market, to exchange such electricity in an efficient manner within a wider area, balancing supply and demand with the larger Union market, and reduce the carbon intensity of their electricity generation. Integration of third countries into the Union electricity market also contributes to the security of electricity supplies in those countries and in the neighbouring Member States. __________________ 46Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L 197, 25.7.2015, p. 24).
Amendment 247 #
Proposal for a regulation
Recital 49 a (new)
Recital 49 a (new)
(49 a) This Regulation shall progressively enter into force in two steps. Between 2023 and 2025 an administrative transitional period where Articles set out in Article 36 (a) and (c) of this Regulation shall apply. Between 2026 and 2030 a comprehensive transitional period where all Articles set out in Article 36 of this Regulation shall apply. During this period free allocation should remain in place.
Amendment 250 #
Proposal for a regulation
Recital 50
Recital 50
(50) An administrative transitional period without financial adjustment should apply during the period 2023 until 2025. A CBAM without financial adjustment should applyto 2025, with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disruptive impacts on trade and European industry. Declarants should have to report on a quarterly basis the actual embedded emissions in goods imported during the administrative transitional period, detailing direct and indirect emissions as well as any carbon price paid abroad.
Amendment 250 #
Proposal for a regulation
Recital 12 a (new)
Recital 12 a (new)
(12a) While the surrendering of CBAM certificates for Union importers addresses the risk of carbon leakage on the internal market, it is essential that the CBAM would also seek to reduce the possibility of Union low-carbon exports being replaced by carbon-intensive items on third country markets or by goods that are not subject to equivalent climate policy and carbon costs, undermining the goal of lowering global emissions. It is therefore necessary to continue addressing the risk of carbon leakage associated with Union exports to third countries that have not yet limited or priced GHG emissions at the same levels as the Union.
Amendment 257 #
Proposal for a regulation
Recital 50 a (new)
Recital 50 a (new)
(50 a) A comprehensive transitional period with financial adjustment should apply during the period 2026 to 2030, with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disproportionate impacts on European industry.
Amendment 258 #
Proposal for a regulation
Recital 50 b (new)
Recital 50 b (new)
(50 b) A temporary Carbon Leakage Protection Reserve should be established between 2031 to 2035, linked to the reduction of free allocation. Each year, the free allocation no longer provided to the CBAM sectors, based on the free allocation phase-out calculation, should be placed into the temporary Carbon Leakage Reserve. To this purpose the Commission shall every year, from 2031 to 2035, present to the parliament and Council a report on the effectiveness of this Regulation in lowering carbon leakage. By 28 February, the following year the Commission shall report to the Parliament and the Council on the entry into force of CBAM and its effectiveness during the preceding year. If the assessment is positive, the allowances placed in the reserve should automatically be auctioned. If the assessment proves negative impact on lowering carbon leakage, the allowances placed in the reserve should automatically be returned to industry, to mitigate the risk of carbon leakage.
Amendment 259 #
Proposal for a regulation
Recital 51
Recital 51
Amendment 265 #
Proposal for a regulation
Recital 52
Recital 52
(52) The Commission should evaluate the application of this Regulation before the end of the administrative transitional period and report to the European Parliament and the Council. The report of the Commission should in particular focus on possibilities to enhance climate actions towards the objective of a climate neutral Union by 2050. The Commission should, as part of that evaluation, initiate collection of information necessary to possibly extend the scope of Annex I to indirect emissions, as well as to other goods and services at risk of carbon leakage, such as finished goods, and to develop methods of calculating embedded emissions based on the environmental footprint methods47 .. The Commission should in particular focus on: (a) the impact on competitiveness of European industry and downstream industry, impact on SMEs, possible disproportionate administrative burden, possible circumvention practices, distortion in trade patterns and possibilities to enhance climate actions towards a climate neutral Union by 2050. Accompanied by proposals to avoid negative impact on such sectors; (b) a proposal to avoid possible carbon leakage in export markets; (c) a proposal to extend the scope of this Regulation to finished goods containing goods listed in Annex I; to ensure competitiveness of European manufacturing industry and prevent carbon leakage; __________________ 47Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
Amendment 268 #
Proposal for a regulation
Recital 13
Recital 13
(13) As an instrument to prevent carbon leakage and reduce GHG emissions the CBAM should ensure that imported products are subject to a regulatory system that applies carbon costs equivalent to the ones that otherwise would have been borne under the EU ETS. The CBAM is a climate measure which should prevent the risk of carbon leakage and support the Union’s increased ambition on climate mitigation, while ensuring WTO compatibility and industrial competitiveness.
Amendment 272 #
Proposal for a regulation
Recital 13 a (new)
Recital 13 a (new)
(13a) As CBAM is a mechanism that addresses the risk of carbon leakage on the internal market for Union imports, it is essential to avoid the risk that Union exports are replaced by more carbon intensive goods on the global market. Consequently, the Commission should analyse its implementation and effectiveness throughout the administrative transitional period and should by the end of that period submit a report to the European Parliament and to the Council that specifies the carbon leakage risk on export markets accompanied, where appropriate, by a legislative proposal to prevent the carbon leakage risk on export markets with safeguards in respect of products intended for export.
Amendment 275 #
Proposal for a regulation
Recital 52 a (new)
Recital 52 a (new)
Amendment 275 #
Proposal for a regulation
Recital 13 b (new)
Recital 13 b (new)
(13b) A centralised arrangement at Union level should be adopted to compensate sectors or sub-sectors which are exposed to a genuine risk of carbon leakage due to significant costs that are actually incurred from GHG emission costs passed on as a consequence of the gradual phase-out of free allocation in favour of the obligation to surrender CBAM certificates. It is appropriate to lay down measures in this Regulation to ensure that no distortions are created on the internal market. The power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the rules outlining this arrangement.
Amendment 278 #
Proposal for a regulation
Recital 13 c (new)
Recital 13 c (new)
(13c) During the comprehensive transition period, but by 1 January 2028 Commission should evaluate the risk of carbon leakage in downstream sectors and end users, including from loss of exports, for operators that produce products covered by Regulation (EU) No 1308/2013 of the European Parliament and of the Council or which use those products as their main input as a cause of the gradual phase-out of free allocation in favour of the obligation to surrender CBAM certificates. To address this risk, the Commission should present legislative proposals under the Common Agricultural Policy.
Amendment 279 #
Proposal for a regulation
Recital 52 b (new)
Recital 52 b (new)
(52 b) In case the CBAM is proven not to be efficient in lowering carbon leakage, creates disproportionate disadvantages for European industry or severe shortcomings appear in the implementation of this Regulation during the comprehensive transitional period, the Commission shall present a new or revised legislative proposal aiming at lowering carbon leakage in order for the Union to reach its goal of climate neutrality 2050.
Amendment 280 #
Proposal for a regulation
Recital 52 c (new)
Recital 52 c (new)
(52 c) If the CBAM is challenged by WTO and as an effect not implemented, the Commission shall present a revised legislative proposal aiming at lowering carbon leakage.
Amendment 282 #
Proposal for a regulation
Recital 53
Recital 53
(53) In light of the above, a dialogue with third countries should continue and there should be space for cooperation and solutions that could inform the specific choices that will be made on the details of the design of the measure during the implementation, in particular during the transitional periods.
Amendment 286 #
Proposal for a regulation
Recital 54
Recital 54
(54) The Commission should strive to engage in an even handed manner and in line with the international obligations of the EU, with the third countries whose trade to the EU is affected by this Regulation, to explore possibilities for dialogue and cooperation with regard to the implementation of specific elements of the Mechanism set out this Regulation and related implementing acts. It should also explore possibilities for concluding agreements to take into account their carbon pricing mechanism, provided that they deliver equivalent GHG emissions reductions and carbon costs constraints.
Amendment 293 #
Proposal for a regulation
Recital 58
Recital 58
(58) In order for CBAM to be efficient in lowering carbon leakage, all possible circumvention practices should be addressed by this Regulation. In order to remedy circumvention of the provisions of this Regulation, the power to adopt acts in accordance with Article 290 of TFEU should be delegated to the Commission in respect of supplementing the list of goods in Annex I.
Amendment 296 #
Proposal for a regulation
Recital 15 a (new)
Recital 15 a (new)
(15a) The Commission should hold consultations and put forward a specific proposal on how part of revenues generated by CBAM could be dedicated to supporting decarbonisation process in third countries, especially in the least developed countries and the countries that are contracting parties to the Treaty establishing the Energy Community. As regards the latter countries the establishment of a system similar to EU ETS with view to alignment of prices with EU ETS should be the prerequisite.
Amendment 302 #
Proposal for a regulation
Article 1 – paragraph 1
Article 1 – paragraph 1
1. This Regulation establishes a carbon border adjustment mechanism (the ‘CBAM’) for addressing greenhouse gas emissions embedded in the goods referred to in Annex I, upon their importation into the customs territory of the Union, in order to prevent the risk of carbon leakage from the EU and contribute to the reduction of global carbon emissions.
Amendment 303 #
Proposal for a regulation
Recital 17
Recital 17
(17) The GHG emissions to be regulated by the CBAM should correspond to those GHG emissions covered by Annex I to the EU ETS in Directive 2003/87/EC, namely carbon dioxide (‘CO2’) as well as, where relevant, nitrous oxide (‘N2O’) and perfluorocarbons (‘PFCs’). The CBAM should initially apply to direct emissions of those GHG from the production of goods up to the time of import into the customs territory of the Union, and after the end of athe administrative transitional period and upon further assessment on the impact on carbon leakage for energy-intensive sectors with a withdrawal of EU ETS indirect cost compensation, as well to indirect emissions, mirroring the scope of the EU ETS.
Amendment 316 #
Proposal for a regulation
Recital 19
Recital 19
(19) However, while the EU ETS sets an absolute cap on the GHG emissions from the activities under its scope and allows tradability of allowances (so called ‘cap and trade system’), the CBAM shouldmust not establish quantitative limits to import, so as to ensure that trade flows are not restricted or disrupted. Moreover, while the EU ETS applies to installations based in the Union, the CBAM should be applied to certain goods imported into the customs territory of the Union to ensure a level playing field and prevent the risk of carbon leakage while ensuring compatibility with the WTO rules.
Amendment 321 #
Proposal for a regulation
Article 1 – paragraph 3 a (new)
Article 1 – paragraph 3 a (new)
3a. The CBAM shall be compatible with WTO rules.
Amendment 336 #
Proposal for a regulation
Recital 23
Recital 23
(23) Given that the CBAM applies to imports of goods into the customs territory of the Union rather than to installations, certain adaptations and simplifications would also need to apply in the CBAM regime. One of those simplifications should consist in a declarative system where importers should report the total verified GHG emissions embedded in goods imported in a given calendar year. A different timing compared to the compliance cycle of the EU ETS should also be applied to avoid any potential bottleneck resulting from obligations for accredited verifiers under this Regulation and the EU ETS. Furthermore, the importers should have the option to prove, in accordance with Union standards for the monitoring, reporting and verification system, that the carbon content of their products is lower than the benchmark, and avail of a CBAM price adapted.
Amendment 348 #
Proposal for a regulation
Recital 24
Recital 24
(24) In terms of sanctions, Member States should apply penalties to infringements or circumvention practises of this Regulation and ensure that they are implemented. The amount of those penalties should be identical to penalties currently applied within the Union in case of infringement of EU ETS according to Article 16(3) and (4) of Directive 2003/87/EC.
Amendment 355 #
Proposal for a regulation
Recital 28
Recital 28
(28) Whilst the ultimate objective of the CBAM is a broader product coverage, it would beis prudent to start with a selected number of sectors with relatively homogeneous products where there is a risk of carbon leakage. The Commission should consider to further extend the scope of included goods, when CBAM is proven efficient to reduce carbon leakage for the sectors included in Annex I of this Regulation. A proposal of the inclusion of finished goods should be presented by the Commission before the start of comprehensive transitional period. Union sectors deemed at risk of carbon leakage are listed in Commission Delegated Decision 2019/70842 . __________________ 42Commission Delegated Decision (EU) 2019/708 of 15 February 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council concerning the determination of sectors and subsectors deemed at risk of carbon leakage for the period 2021 to 2030 (OJ L 120, 8.5.2019, p. 2).
Amendment 366 #
Proposal for a regulation
Article 3 – paragraph 1 – point 11
Article 3 – paragraph 1 – point 11
Amendment 372 #
Proposal for a regulation
Recital 29
Recital 29
(29) The goods under this Regulation should be selected after a careful analysis of their relevance in terms of cumulated GHG emissions and risk of carbon leakage in the corresponding EU ETS sectors while limiting complexity and administrative burden for European industry, companies and SMEs. In particular, the actual selection should take into account basic materials and basic products covered by the EU ETS with the objective of ensuring that imports of energy intensive products into the Union are on equal footing with EU products in terms of EU ETS carbon pricing, and to mitigate risks of carbon leakage. Other relevant criteria to narrow the selection should be: firstly, relevance of sectors in terms of emissions, namely whether the sector is one of the largest aggregate emitters of GHG emissions; secondly, sector’s exposure to significant risk of carbon leakage, as defined pursuant to Directive 2003/87/EC; thirdly, the need to balance broad coverage in terms of GHG emissions while limiting complexity and administrative effort.
Amendment 405 #
Proposal for a regulation
Recital 38
Recital 38
(38) As importers of goods covered by this Regulation should not have to fulfil their CBAM obligations under this Regulation at the time of importation, specific administrative measures should be applied to ensure that the obligations are fulfilled at a later stage. Therefore, importers should only be entitled to import CBAM goods after they have been granted an authorisation by competent authorities responsible for the application of this Regulation.the CBAM authority. (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 420 #
Proposal for a regulation
Recital 46
Recital 46
(46) To avoid risks of circumvention and improve the traceability of actual CO2 emissions from import of electricity and its use in goods, the calculation of actual emissions should only be permitted through a number of strict conditions. In particular, it should be necessary to demonstrate a firm nomination of the allocated interconnection capacity and that there is a direct contractual relation between the purchaser and the producer of the renewable and low carbon electricity, or between the purchaser and the producer of electricity having lower than default value emissions. .
Amendment 423 #
Proposal for a regulation
Recital 46 a (new)
Recital 46 a (new)
(46a) To reduce the risk of carbon leakage as well as to ensure a level playing field for European industry, all practices of circumvention should be prohibited. The Commission should evaluate the risk of circumvention practices in all sectors included in Annex I, especially the likelihood of transshipment, modified trade patterns towards downstream products, as well as resource shuffling, cost absorption, manipulation of emissions data, wrongful labelling of goods and slight modifications of the product so as to import a product under a different customs code . The Commission should be empowered to adopt, when appropriate, delegated acts to strengthen anti- circumvention measures .
Amendment 429 #
Proposal for a regulation
Recital 48
Recital 48
(48) Integration of third countries into the Union electricity market is an important drive for those countries to accelerate their transition to energy systems with high shares of renewable energies. Market coupling for electricity, as set out in Commission Regulation (EU) 2015/122246 , enables third countries to better integrate electricity from renewable and low carbon energies into the electricity market, to exchange such electricity in an efficient manner within a wider area, balancing supply and demand with the larger Union market, and reduce the carbon intensity of their electricity generation. Integration of third countries into the Union electricity market also contributes to the security of electricity supplies in those countries and in the neighbouring Member States. __________________ 46Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L 197, 25.7.2015, p. 24).
Amendment 433 #
Proposal for a regulation
Recital 49 a (new)
Recital 49 a (new)
(49a) This Regulation should progressively enter into force in two steps. Between 2023 and 2025 an administrative transitional period in which Article 36(3) (a) and(c) should apply. Between 2026 and 2030 a comprehensive transitional period in which Article 36 should apply. During this second period free allocation should remain in place.
Amendment 436 #
Proposal for a regulation
Chapter III – title
Chapter III – title
Amendment 437 #
Proposal for a regulation
Article 11 – title
Article 11 – title
Amendment 437 #
Proposal for a regulation
Recital 50
Recital 50
(50) An administrative transitional period without financial adjustment should apply during the period 2023 until 2025. A CBAM without financial adjustment should applyto 2025, with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disruptive impacts on trade and European industry. Declarants should have to report on a quarterly basis the actual embedded emissions in goods imported during the administrative transitional period, detailing direct and indirect emissions as well as any carbon price paid abroad.
Amendment 440 #
Proposal for a regulation
Article 11 – paragraph 1
Article 11 – paragraph 1
Amendment 445 #
Proposal for a regulation
Article 11 – paragraph 1 – subparagraph 1
Article 11 – paragraph 1 – subparagraph 1
Amendment 449 #
Proposal for a regulation
Article 11 – paragraph 1 a (new)
Article 11 – paragraph 1 a (new)
1a. The Commission shall appoint the competent authority to perform obligations referred to in Articles 17 to 24 as the CBAM Authority.
Amendment 449 #
Proposal for a regulation
Recital 50 a (new)
Recital 50 a (new)
(50a) A comprehensive transitional period with financial adjustment should apply during the period 2026 to 2030, with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disproportionate impacts on European industry, downstream sectors and end users, as well as on importers and third country producers.
Amendment 451 #
Proposal for a regulation
Article 11 – paragraph 2
Article 11 – paragraph 2
Amendment 451 #
Proposal for a regulation
Recital 50 b (new)
Recital 50 b (new)
(50b) A temporary Carbon Leakage Protection Reserve should be established between 2031 to 2035, linked to the reduction of free allocation. Each year, the free allocation no longer provided to the CBAM sectors, based on the free allocation phase-out calculation, should be placed into the temporary Carbon Leakage Protection Reserve. For that purpose the Commission should present every year, from 2031 to 2035, to the Parliament and to the Council a report on the effectiveness of this Regulation in lowering carbon leakage. By 28 February of the year following the presentation of the report the Commission should report to the Parliament and to the Council on the entry into force of CBAM and its effectiveness during the preceding year. If the Commission’s assessment is positive about the effectiveness of this Regulation in addressing carbon leakage, the allowances placed in the reserve should be automatically auctioned. If the Commission’s assessment finds that this Regulation does not effectively lower carbon leakage, the allowances placed in the reserve should be automatically returned to industry, to mitigate the risk of carbon leakage.
Amendment 453 #
Proposal for a regulation
Recital 51
Recital 51
Amendment 458 #
Proposal for a regulation
Article 12 – title
Article 12 – title
Amendment 458 #
Proposal for a regulation
Recital 52
Recital 52
(52) The Commission should evaluate the application of this Regulation before the end of the administrative transitional period and report to the European Parliament and the Council. The report of the Commission should in particular focus on possibilities to enhance climate actions towards the objective of a climate neutral Union by 2050. The Commission should, as part of that evaluation, initiate collection of information necessary to possibly extend the scope of Annex I to indirect emissions, as well as to other goods and services at risk of carbon leakage, such as finished goods, and to develop methods of calculating embedded emissions based on the environmental footprint methods47 . The Commission should in particular focus on the impact on competitiveness of European industry and downstream industry, impact on SMEs, possible disproportionate administrative burden, possible circumvention practices, distortion in trade patterns and possibilities to enhance climate actions towards a climate neutral Union by 2050; accompanied by proposals to avoid negative impact on such sectors; a proposal to avoid possible carbon leakage in export markets; a proposal to extend the scope of this Regulation to finished goods containing goods listed in Annex I; to ensure the competitiveness of European manufacturing industry and prevent carbon leakage. __________________ 47Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
Amendment 460 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
Amendment 468 #
Proposal for a regulation
Article 14 – title
Article 14 – title
Amendment 471 #
Proposal for a regulation
Article 14 – paragraph 1
Article 14 – paragraph 1
Amendment 475 #
Proposal for a regulation
Article 14 – paragraph 2
Article 14 – paragraph 2
Amendment 478 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
Amendment 480 #
Proposal for a regulation
Recital 52 a (new)
Recital 52 a (new)
(52a) During the comprehensive transitional period, bi-annual between 2025 and 2030 and every year thereafter until 2035, the Commission should evaluate the application of this Regulation and report to the European Parliament and to the Council. The Commission should in particular focus on the impact on European industry and downstream industry of sectors listed in Annex I, and possible additional administrative burden, the effectiveness of this Regulation in reducing carbon leakage and possible circumvention practices, and the impact of CBAM on Union trade of goods listed in Annex I and possible distortion in trade patterns, as well as the assessment of the impact of CBAM on emissions from sectors producing goods listed in Annex I, relating to both emissions in the Union and emissions embedded in Union imports of those goods, and the export of those goods to third countries from third country installations exporting to the Union. If the distortions in trade patterns point at the possibility of circumvention of the Regulation by excessive importation before the end of comprehensive transition period, CBAM Authority should apply the obligation to surrender CBAM certificates for the emissions from excessive imports in the first year after the end of comprehensive transition period.
Amendment 483 #
Proposal for a regulation
Article 14 – paragraph 4
Article 14 – paragraph 4
Amendment 485 #
Proposal for a regulation
Recital 52 b (new)
Recital 52 b (new)
(52b) In the event that the CBAM is proven not to be efficient in lowering carbon leakage, the Commission should present a new or revised legislative proposal that aims to lower carbon leakage. Once the CBAM has fully demonstrated its WTO-compatibility, its effectiveness in equalising CO2 costs between imported and domestic products and in protecting the competitiveness of Union exports, the free allocation received by the sectors within the scope of the CBAM should be gradually phased out, however not prior to2030. That phase-out of free allocation should be kept under review following the entry into force and, in light of the effective implementation of the CBAM.
Amendment 487 #
Proposal for a regulation
Recital 52 c (new)
Recital 52 c (new)
(52c) If the CBAM is challenged by WTO and as an effect cancelled or not implemented, the Commission should present a legislative proposal aiming at lowering carbon leakage. In this situation free allowances should no longer be phased out, and those already placed in the Carbon Border Adjustment Reserve should automatically be returned to industry, to mitigate the risk of carbon leakage.
Amendment 489 #
Proposal for a regulation
Recital 52 d (new)
Recital 52 d (new)
(52d) In the event that the Commission in its annual report between 2031-2035 concludes that, the CBAM has been effectively implemented in a way that leads to a level of carbon leakage protection at least equivalent to that of the free allocation system which it replaces under this Regulation, the allowances placed in the Carbon Border Adjustment Reserve for the preceding calendar year should be made available to support innovation in accordance with Article 10a(8) of Directive 2003/87/EC.
Amendment 490 #
Proposal for a regulation
Article 15
Article 15
Amendment 490 #
Proposal for a regulation
Recital 52 e (new)
Recital 52 e (new)
(52e) In the event that the Commission in its report concludes that the CBAM has not been effectively implemented in a way that leads to a level of carbon leakage protection at least equivalent to that of the free allocation system which it replaces, the allowances placed in the Carbon Border Adjustment Reserve for the preceding calendar year should be reallocated to installations in accordance with Article10a(1) of Directive 2003/87/EC.
Amendment 491 #
Proposal for a regulation
Recital 52 f (new)
Recital 52 f (new)
(52f) During the first years of implementation of this Regulation, the production of products listed in Annex I should benefit from free allocation in reduced amounts. A factor reducing the free allocation for the production of those products should be applied (CBAM factor). The CBAM factor should be equal to 100 % for the period between 2026 and the end of 2030, 80 % in 2031 and should be reduced by 20 percentage points each year to reach 0 % by the fifth year.
Amendment 492 #
Proposal for a regulation
Recital 52 g (new)
Recital 52 g (new)
(52g) Member States should be able to adopt transitional financial measures in favour of sectors or subsectors which suffer loss of production, employment, sales or profitability caused by an increase in GHG emission costs resulting from the gradual withdrawal of free allowances pursuant to Article 10a(1a) of Directive 2003/87/EC and lack of comparably stringent emission reduction obligations in third countries and provided that the CBAM is not fully effective in protecting against such carbon leakage and that such financial measures are in accordance with State aid rules. The sectors or subsectors should be determined individually at Member State level, based on factors characteristic to that Member State, such as trade intensity with third countries and emission intensity within the sector or subsector concerned.
Amendment 494 #
Proposal for a regulation
Recital 53
Recital 53
(53) In light of the above, a dialogue with third countries should continue and there should be space for cooperation and solutions that could inform the specific choices that will be made on the details of the design of the measure during the implementation, in particular during the transitional periods.
Amendment 496 #
Proposal for a regulation
Article 16 – title
Article 16 – title
Accounts in the national registries CBAM Registry 1. The CBAM Authority shall assign to each authorised declarant a unique CBAM account number. Each declarant shall be granted access to its account in the CBAM Registry to fulfil its obligations pursuant to Article 10. 2. The CBAM Authority shall set up the account at the time of authorisation and notify the authorised declarant thereof. 3. If the authorised declarant has ceased activity or the CBAM authorisation is withdrawn, the CBAM Authority shall close the account of that declarant. 4. The Commission shall adopt implementing acts laying down procedures concerning the accounts of the CBAM Registry. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 29(2).
Amendment 498 #
Proposal for a regulation
Article 16 – paragraph 1
Article 16 – paragraph 1
Amendment 501 #
Proposal for a regulation
Article 16 – paragraph 2
Article 16 – paragraph 2
Amendment 503 #
Proposal for a regulation
Article 16 – paragraph 3
Article 16 – paragraph 3
Amendment 504 #
Proposal for a regulation
Article 16 – paragraph 4
Article 16 – paragraph 4
Amendment 505 #
Proposal for a regulation
Recital 54
Recital 54
(54) The Commission should strive to engage in an even handed manner and in line with the international obligations of the EU, with the third countries whose trade to the EU is affected by this Regulation, to explore possibilities for dialogue and cooperation with regard to the implementation of specific elements of the Mechanism set out this Regulation and related implementing acts. It should also explore possibilities for concluding agreements to take into account their carbon pricing mechanism, provided that they deliver equivalent GHG emissions reductions and carbon costs constraints.
Amendment 516 #
Proposal for a regulation
Article 17 – paragraph 3
Article 17 – paragraph 3
Amendment 521 #
Proposal for a regulation
Recital 58
Recital 58
(58) In order for CBAM to be efficient in lowering carbon leakage, all possible circumvention practices should be addressed by this Regulation. In order to remedy circumvention of the provisions of this Regulation, the power to adopt acts in accordance with Article 290 of TFEU should be delegated to the Commission in respect of supplementing the list of goods in Annex I.
Amendment 523 #
Proposal for a regulation
Article 17 – paragraph 4 – point c
Article 17 – paragraph 4 – point c
(c) the CBAM account number in the CBAM Registry.
Amendment 535 #
Proposal for a regulation
Article 17 – paragraph 8 a (new)
Article 17 – paragraph 8 a (new)
8a. The CBAM Authority may verify the accuracy and completeness of the information given by the applicant in accordance with Article 5(3) and the existence, authenticity, accuracy and validity of any supporting document. Such controls may be carried out at the premises of the applicant.
Amendment 539 #
Proposal for a regulation
Article 17 – paragraph 9 a (new)
Article 17 – paragraph 9 a (new)
9a. The Commission shall adopt, by means of implementing acts, the modalities for the application of the criteria referred to in paragraph 1 and for guarantees referred to in paragraph 6. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 29(2).
Amendment 541 #
Proposal for a regulation
Article 1 – paragraph 1
Article 1 – paragraph 1
1. This Regulation establishes a carbon border adjustment mechanism (the ‘CBAM’) for addressing greenhouse gas emissions embedded in the goods referred to in Annex I, upon their importation into the customs territory of the Union, in order to prevent the risk of carbon leakage from the Union and contribute to the reduction of global GHG emissions.
Amendment 542 #
Proposal for a regulation
Article 18 – paragraph 2
Article 18 – paragraph 2
2. In addition to paragraph 1, a national accreditation bodThe CBAM Authority may on request accredit a person as a verifier under this Regulation after checking the documentation attesting its capacity to apply the verification principles referred to Annex V to perform the obligations of control of the embedded emissions established in Articles 8, 10 and 38.
Amendment 557 #
Proposal for a regulation
Article 19 – paragraph 4
Article 19 – paragraph 4
Amendment 560 #
Proposal for a regulation
Article 19 a (new)
Article 19 a (new)
Article 19 a Revenues The revenues generated by the sale of CBAM certificates shall constitute internal assigned revenue in accordance with Article 21(4) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council . They shall be assigned to cover the costs of the operation and maintenance of the CBAM Authority. Any revenue remaining after covering these costs shall be assigned to the Union budget.
Amendment 570 #
Proposal for a regulation
Article 1 – paragraph 3
Article 1 – paragraph 3
3. The mechanism will progressiveintends to complement and gradually become an alternative to the mechanisms established under Directive 2003/87/EC to prevent the risk of carbon leakage, notably the allocation of allowances free of charge in accordance with Article 10a of that Directive.
Amendment 585 #
Proposal for a regulation
Article 22 – paragraph 4
Article 22 – paragraph 4
Amendment 598 #
Proposal for a regulation
Article 25 – paragraph 5 a (new)
Article 25 – paragraph 5 a (new)
5a. As of the initiation of investigations under Articles 28 and 29 and having informed the Member States in due time, the Commission may direct the customs authorities to take the appropriate steps to register imports, so that measures may subsequently be applied against those imports from the date of such registration. Imports shall be made subject to registration following a request, from the Union industry, which contains sufficient evidence to justify such action. Imports may also be made subjecte introduced by Commission regulation. Such regulation shall specify the purpose of the action and, if appropriate, the estimated amount of possible future liability. Imports shall not be made subject to registration for a period longer than nine months.
Amendment 606 #
Proposal for a regulation
Article 26 – paragraph 4 – point f
Article 26 – paragraph 4 – point f
Amendment 616 #
Proposal for a regulation
Article 27 – paragraph 2
Article 27 – paragraph 2
2. Practices of circumvention include situations where a change in the pattern of trade in relation to goods included in the scope of this Regulation, whether slightly modified or not, stems from a practice, process or work that have has insufficient due cause or economic justification other than avoiding obligations as laid down in this Regulation and consist in replacing those goods with slightly modified products, which are not included in the list of goods in Annex I but belong to a sector included in the scope of this Regulation, or undermining their effects, including on overall GHG emissions and on prices of the like products.
Amendment 618 #
Proposal for a regulation
Article 27 – paragraph 2 – point 1 (new)
Article 27 – paragraph 2 – point 1 (new)
(1) The practice, processor work referred to in the first subparagraph include, inter alia:
Amendment 619 #
Proposal for a regulation
Article 27 – paragraph 2 – subparagraph 1 (new)
Article 27 – paragraph 2 – subparagraph 1 (new)
(a) the slight modification of a product to make it fall under another customs code which are not subject to the obligations of this Regulation; b) false declarations regarding identity of the producer, the product concerned, the nature of the product concerned or the production process; (c) the consignment of the product concerned via third countries where no or more favourable obligations apply; (d) the reorganisation by exporters or producers of their patterns and channels of sales in order to avoid obligations of this Regulation, or undermine their effects, for instance via practices of resource shuffling. Resource shuffling shall be defined as any practice, process or work that that have insufficient due cause or economic justification other than avoiding obligations as laid down in this Regulation, or undermining their effects, without delivering environmental benefits on global GHG emissions; (e) in the circumstances indicated in paragraph 2, the assembly of parts by an assembly operation in the Union or a third country.
Amendment 634 #
Proposal for a regulation
Chapter VI a (new)
Chapter VI a (new)
Amendment 643 #
Proposal for a regulation
Article 3 – paragraph 1 – point 11
Article 3 – paragraph 1 – point 11
(11) ‘competentCBAM authority’ means the authority, designated by each Member State appointed in accordance with Article 11 of this Regulation;
Amendment 652 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
Amendment 667 #
Proposal for a regulation
Article 30 – paragraph 2 a (new)
Article 30 – paragraph 2 a (new)
2a. During the comprehensive transitional period, biannual between 2025-2030 and every year thereafter until 2035 the Commission shall evaluate the application of this Regulation and report to the European parliament and the Council. The Commission should in particular focus on: (a) the impact on European industry and downstream industry of sectors listed in Annex I, as well as on SMEs and possible additional administrative burden for SMEs; (b) the effectiveness of this Regulation in reducing carbon leakage and possible circumvention practices; and (c) the impact of CBAM on Union trade of goods listed in Annex I and possible distortion in trade patterns;
Amendment 674 #
Proposal for a regulation
Article 30 – paragraph 3 a (new)
Article 30 – paragraph 3 a (new)
3a. In case the CBAM is proven not to be efficient in lowering carbon leakage, the Commission shall present a new or revised legislative proposal aiming at lowering carbon leakage. Once the CBAM has fully demonstrated its WTO- compatibility, its effectiveness in equalising CO2 costs between imported and domestic products and in protecting the competitiveness of European exports, the free allocation received by these sectors should be gradually phased out, however not prior to 2030. This phase-out of free allocation should be kept under review in light of the entry into force and effective implementation of the Carbon Border Adjustment Mechanism.
Amendment 676 #
Proposal for a regulation
Article 30 – paragraph 3 b (new)
Article 30 – paragraph 3 b (new)
3b. In the event that the Commission in its annual report between 2031-2035 concludes that, the CBAM has been effectively implemented in a way that leads to a level of carbon leakage protection at least equivalent to that of the free allocation system which it replaces under this Article, the allowances placed in the Carbon Border Adjustment Reserve for the preceding calendar year shall be made available to support innovation in accordance with Article 10a(8) of Directive 2003/87/EC.
Amendment 677 #
Proposal for a regulation
Article 30 – paragraph 3 c (new)
Article 30 – paragraph 3 c (new)
3c. In the event that the Commission in its report concludes that the CBAM has not been effectively implemented in a way that leads to a level of carbon leakage protection at least equivalent to that of the free allocation system which it replaces, the allowances placed in the Carbon Border Adjustment Reserve for the preceding calendar year shall be reallocated to installations in accordance with Article10a(1) of Directive 2003/87/EC.
Amendment 694 #
Proposal for a regulation
Article 6 – paragraph 2 – point c a (new)
Article 6 – paragraph 2 – point c a (new)
(ca) copy of the verification report issued by the verifier under Article 8 and Annex V
Amendment 695 #
Proposal for a regulation
Article 31 – paragraph 2 a (new)
Article 31 – paragraph 2 a (new)
2a. For the first years of operation of this Regulation, the production of products listed in Annex I shall benefit from free allocation in reduced amounts. A factor reducing the free allocation for the production of those products shall be applied (CBAM factor). The CBAM factor shall be equal to 100 % for the period between 2026 and the end of 2030, 80 % in 2031 and shall be reduced by 20 percentage points each year to reach 0 % by the fifth year.
Amendment 700 #
Proposal for a regulation
Article 32 – paragraph 1
Article 32 – paragraph 1
During the administrative transitional period of this Regulation, the CBAM mechanism shall apply as a reporting obligation as set out in Articles 33 to 35.
Amendment 745 #
Proposal for a regulation
Annex III – point 4 – point 4.1 – paragraph 1
Annex III – point 4 – point 4.1 – paragraph 1
When actual emissions cannot be adequately determined by the authorised declarant, default values shall be used. These values shall be set at the average emission intensity of the worst 10 per cent worst performing installations of each exporting country and for each of the goods listed in Annex I other than electricity, increased by a mark-up, the latter to be determined in the implementing acts of this Regulation. When reliable data for the exporting country cannot be applied for a type of goods, the default values shall be based on the average emission intensity of the 105 per cent worst performing EU installations for that type of goods.
Amendment 776 #
Proposal for a regulation
Article 10 – paragraph 1
Article 10 – paragraph 1
1. The Commission shall, upon request by an operator of an installation located in a third country, register the information on that operator and on its installation in a central databaseCBAM registry referred to in Article 14(4).
Amendment 786 #
Proposal for a regulation
Article 10 – paragraph 7
Article 10 – paragraph 7
7. An operator may disclose tThe information on the verification ofed embedded emissions referred to in paragraph 5 to an authorised declarantshall be publicly accessible via the CBAM registry. The authorised declarant shall be entitled to avail itself of that disclosed information to fulfil the obligation referred to in Article 8.
Amendment 795 #
Proposal for a regulation
Chapter III – title
Chapter III – title
Competent authoritiesBAM authority (This amendment applies throughout the text. Adopting it will necessitate corresponding changes throughout.)
Amendment 797 #
Proposal for a regulation
Article 11 – title
Article 11 – title
Amendment 798 #
Proposal for a regulation
Article 11 – paragraph -1 (new)
Article 11 – paragraph -1 (new)
-1. The Commission shall appoint the competent authority to perform the obligations referred to in Articles 17 to 24 as the CBAM authority.
Amendment 801 #
Proposal for a regulation
Article 11 – paragraph 1
Article 11 – paragraph 1
Amendment 807 #
Proposal for a regulation
Article 11 – paragraph 1 – subparagraph 2
Article 11 – paragraph 1 – subparagraph 2
Amendment 811 #
Proposal for a regulation
Article 11 – paragraph 2
Article 11 – paragraph 2
Amendment 816 #
Proposal for a regulation
Article 12 – title
Article 12 – title
Amendment 819 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
1. The Commission shall assist the competent authorities in carrying out their obligations under this Regulation and coordinate their activities. BAM authority shall, without delay, take any decision that is required to implement this Regulation. 2. Any decision of the CBAM authority shall take effect from the date of its notification to the addressee of the decision. 3. If the CBAM authority considers that it does not have all the necessary information to take a decision, it shall contact the addressee of the decision and specify what additional information is required. The addressee of the decision shall submit the required information to the CBAM authority without delay. 4. The addressee of the decision shall inform the CBAM authority without delay of any changes to the information provided arising after the decision was taken, which may influence its continuation or content. In this case, the CBAM authority shall reassess its decision in light of that information. 5. Any decision taken by the CBAM authority which adversely affects the addressee of the decision shall set out the grounds on which it is based and shall include a reference to the right of appeal provided for in Article 27a. Before the decision is taken, the CBAM authority shall give the addressee of the decision the opportunity to make its point of view known to the CBAM authority within a fixed period of time. Following the expiry of that period, the addressee of the decision shall be notified of the decision in the appropriate form. 6. The CBAM authority may, at any time, annul, revoke or amend its decision upon reasoned request by the addressee of the decision or on its own initiative, if appropriate. 7. The Commission shall specify, by means of implementing acts, any further detailed arrangement or procedural rule concerning the decision-making of the CBAM authority. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2).
Amendment 826 #
Proposal for a regulation
Article 14 – title
Article 14 – title
Amendment 827 #
Proposal for a regulation
Article 14 – paragraph 1
Article 14 – paragraph 1
1. The competent authority of each Member State shall establish a national registry of declarants authorised in that Member State in the form of a standardised electronic database containing the data regardCBAM Authority shall set up a CBAM Registry for the execution of processes relating theo CBAM certificates of those declarants, and to provide for confidentiality, in accordance with the conditions set out in Article 13s 22 to 26.
Amendment 829 #
Proposal for a regulation
Article 14 – paragraph 2 – introductory part
Article 14 – paragraph 2 – introductory part
2. The database referred to in paragraph 1CBAM registry shall contain accounts database with information about each authorised declarant, in particular:
Amendment 830 #
Proposal for a regulation
Article 14 – paragraph 2 a (new)
Article 14 – paragraph 2 a (new)
2a. The CBAM registry shall also contain, in a separate section of the database, the names and additional details of the operator and of the third country installations registered in accordance with Article 10.
Amendment 838 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The information in the database referred to in paragraph 2 shall be confidentialis database shall be confidential. Only the names of the authorised declarants and of the operator and of the third country installations included in the database shall be accessible to the public.
Amendment 845 #
Proposal for a regulation
Article 14 – paragraph 4
Article 14 – paragraph 4
4. The Commission shall establish a central database accessible to the publicadopt implementing acts contaicerning the names, addresses and contact details of the operators and the location of installations in third countries in accordance with Article 10(2). An operator may choose not to have its name, address and contact details accessible to the publicinfrastructure and specific processes of the CBAM Registry and the electronic databases containing the information above. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2).
Amendment 846 #
Proposal for a regulation
Article 15
Article 15
Amendment 856 #
Proposal for a regulation
Article 16 – title
Article 16 – title
Accounts in the national rCBAM Registriesy
Amendment 859 #
Proposal for a regulation
Article 16 – paragraph 1
Article 16 – paragraph 1
1. The competentCBAM authority shall assign to each authorised declarant a unique CBAM account number.
Amendment 860 #
Proposal for a regulation
Article 16 – paragraph 2
Article 16 – paragraph 2
2. Each authorised declarant shall be granted access to its account in the CBAM registry to fulfil its obligations pursuant to Article 22.
Amendment 861 #
Proposal for a regulation
Article 16 – paragraph 4 a (new)
Article 16 – paragraph 4 a (new)
4a. The Commission shall adopt implementing acts laying down procedures concerning the accounts of the CBAM Registry. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2).
Amendment 882 #
Proposal for a regulation
Article 17 – paragraph 3
Article 17 – paragraph 3
Amendment 887 #
Proposal for a regulation
Article 17 – paragraph 4 – point c
Article 17 – paragraph 4 – point c
(c) the CBAM account number in the CBAM registry.
Amendment 897 #
Proposal for a regulation
Article 17 – paragraph 8 a (new)
Article 17 – paragraph 8 a (new)
8a. The CBAM authority may verify the accuracy and completeness of the information given by the applicant in accordance with Article 5(3) and the existence, authenticity, accuracy and validity of any supporting document. Such controls may be carried out at the premises of the applicant.
Amendment 900 #
Proposal for a regulation
Article 17 – paragraph 9 a (new)
Article 17 – paragraph 9 a (new)
9a. The Commission shall adopt, by means of implementing acts, the modalities for the application of the criteria referred to in paragraph 1 and for guarantees referred to in paragraph 6. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2).
Amendment 928 #
Proposal for a regulation
Article 19 – paragraph 4
Article 19 – paragraph 4
Amendment 932 #
Proposal for a regulation
Article 19 a (new)
Article 19 a (new)
Amendment 949 #
Proposal for a regulation
Article 22 – paragraph 4
Article 22 – paragraph 4
Amendment 961 #
Proposal for a regulation
Article 24 a (new)
Article 24 a (new)
Amendment 967 #
Proposal for a regulation
Article 25 – paragraph 5 a (new)
Article 25 – paragraph 5 a (new)
5a. As of the initiation of investigations under Articles 26 and 27 and having informed the Member States in due time, the Commission may direct the customs authorities to take the appropriate steps to register imports, so that measures may subsequently be applied against those imports from the date of such registration. Imports shall be made subject to registration following a request, from the Union industry, which contains sufficient evidence to justify such action. Imports may also be made subject to registration on the Commission's own initiative. Registration shall be introduced by Commission regulation. Such regulation shall specify the purpose of the action and, if appropriate, the estimated amount of possible future liability. Imports shall not be made subject to registration for a period longer than nine months.
Amendment 976 #
Proposal for a regulation
Article 26 – paragraph 4 – point f
Article 26 – paragraph 4 – point f
Amendment 997 #
Proposal for a regulation
Article 27 – paragraph 2
Article 27 – paragraph 2
2. Practices of circumvention include situations where a change in the pattern of trade in relation to goods included in the scope of this Regulation, whether slightly modified or not, stems from a practice, process or work that have has insufficient due cause or economic justification other than avoiding obligations as laid down in this Regulation and consist in replacing those goods with slightly modified products, which are not included in the list of goods in Annex I but belong to a sector included in the scope of this Regulation, or undermining their effects, including on overall GHG emissions and on prices of the like products.
Amendment 1000 #
Proposal for a regulation
Article 27 – paragraph 2 – subparagraph 1 a (new)
Article 27 – paragraph 2 – subparagraph 1 a (new)
Amendment 1081 #
Proposal for a regulation
Chapter VI a (new)
Chapter VI a (new)
Chapter VI a Appeals
Amendment 1082 #
Proposal for a regulation
Article 27 a (new)
Article 27 a (new)
Article 27a Appeals against decisions taken by the CBAM Authority 1. An appeal shall lie from decisions of the CBAM Authority that adversely affect any interested person, including decisions on penalties, circumvention and actual emission values. Those decisions shall take effect only as from the date of expiration of the appeal period of two months. The filing of the appeal shall have suspensive effect. Products concerned by an appeal will be subject to registration according to Article 25(5a). 2. Any party to proceedings adversely affected by a decision may appeal. Any other parties to the proceedings shall be parties to the appeal proceedings as of right. 3. The Board of Appeal shall be newly set up and consist of three full members, to be respectively appointed by the Council, by the European Parliament and by the Commission. The chair will be appointed by the Council. The Council and the European Parliament will respectively appoint two additional alternate members. 4. The Commission shall adopt delegated acts pursuant to Article 28, to define the composition, the appointment and the procedures of the Board of Appeal with a view to assure the independence of its members, including during the transitional period. During the transitional period the Commission will hold the functions of the Board of Appeal.
Amendment 1084 #
Proposal for a regulation
Article 27 b (new)
Article 27 b (new)
Article 27b Examination of appeals 1. The Board of Appeal shall examine whether the appeal is admissible. 2. In the examination of the appeal, the Board of Appeal shall invite the parties, as often as necessary, to file observations, within a period to be fixed by the Board of Appeal, on communications from the other parties or issued by itself. 3. Following the examination as to the admissibility of the appeal, the Board of Appeal shall decide on the appeal. The Board of Appeal may either exercise any power within the competence of the CBAM Authority or remit the case to the latter for further prosecution. 4. If the Board of Appeal remits the case for further prosecution to the CBAM Authority, the latter shall be bound by the line of reasoning of the Board of Appeal, in so far as the facts are the same. 5. The decisions of the Board of Appeal shall take effect only as from the date of expiry of a period of two months, if an action has been brought before the General Court within that period, as from the date of dismissal of such action or of any appeal filed with the Court of Justice against the decision of the General Court.
Amendment 1086 #
Proposal for a regulation
Article 27 c (new)
Article 27 c (new)
Article 27c Actions before the Court of Justice 1. Actions may be brought before the General Court against decisions of the Boards of Appeal in relation to appeals. 2. Actions may be brought before the General Court against any decision of the CBAM Authority. In this case administrative appeal under Article 27b will be precluded. 3. The action may be brought on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the TFEU, infringement of this Regulation or of any rule of law relating to their application or misuse of power. 4. The General Court shall have jurisdiction to annul or to alter the contested decision. 5. The action shall be open to any party to proceedings before the Board of Appeal adversely affected by its decision. 6. The action shall be brought before the General Court within two months of the date of notification of the decision of the Board of Appeal in case of action under paragraph 1 of this Article and within two month of the date of the notification of the decision of the CBAM Authority in case of actions under paragraph 2 of this Article. 7. The CBAM Authority shall take the necessary measures to comply with the judgment of the General Court or, in the event of an appeal against that judgment, the Court of Justice.
Amendment 1123 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
2. BThe Commission shall evaluate the application of this Regulation before the end of the administrative transitional period, the Commission shall present a report to the European Parliament and the Council on the application of this Regulation. The report shall contain, in particular, and report to the European Parliament and the Council. The first report of the Commission shall in particular focus on possibilities to enhance climate actions towards the objective of a climate neutral Union by 2050. The Commission shall, as part of that evaluation, initiate the collection of information that would be necessary to extend the scope of Annex I to indirect emissions, as well as to other goods and services at risk of carbon leakage, such as finished goods, and to develop methods of calculating embedded emissions based on the environmental footprint methods. The report shall include: (a) the impact on competitiveness of European industry and downstream industry, impact on SMEs, possible disproportionate administrative burden, possible circumvention practices, distortion in trade patterns and possibilities to enhance climate actions towards a climate neutral Union by 2050. Accompanied by proposals to avoid negative impact on such sectors; (b) a proposal to avoid possible carbon leakage in export markets; (c) a proposal to extend the scope of this Regulation to finished goods containing goods listed in Annex I; to ensure competitiveness of European manufacturing industry and prevent carbon leakage; (d) the assessment of the possibilities to further extend the scope of embedded emissions to indirect emissions and to other goods at risk of carbon leakage than those already covered by this Regulation, as well as an assessment of the governance system. It shall also contain the assessment of the possibility to further extend the scope to embedded emissions of transportation services as well as to goods further down the value chain and services that may be subject to the risk of carbon leakage in the future.
Amendment 1152 #
Proposal for a regulation
Article 30 – paragraph 2 a (new)
Article 30 – paragraph 2 a (new)
2a. During the comprehensive transitional period, biannual between 2025-2030 and every year thereafter until 2035 the Commission shall evaluate the application of this Regulation and report to the European Parliament and the Council. The Commission shall in particular focus on: (a) the impact on European industry and downstream industry of sectors listed in Annex I, as well as on SMEs and possible additional administrative burden for SMEs; (b) the effectiveness of this Regulation in reducing carbon leakage and possible circumvention practices; and (c) the impact of CBAM on Union trade of goods listed in Annex I and possible distortion in trade patterns;
Amendment 1157 #
Proposal for a regulation
Article 30 – paragraph 2 b (new)
Article 30 – paragraph 2 b (new)
2b. By 1 January 2028 Commission shall evaluate the risk of carbon leakage in downstream sectors and end users, including from loss of exports, for operators that produce products covered by Regulation (EU) No 1308/2013 or which use those products as their main input as a cause of the gradual phase-out of free allocation in favour of the obligation to surrender CBAM certificates. To address that risk, the Commission shall present legislative proposals under the Common Agricultural Policy.
Amendment 1219 #
Proposal for a regulation
Article 32 – paragraph 1
Article 32 – paragraph 1
During the administrative transitional period of this Regulation, the CBAM mechanism shall apply as a reporting obligation as set out in Articles 33 to 35.
Amendment 1274 #
Proposal for a regulation
Annex III – point 3 – paragraph 2 – introductory part
Annex III – point 3 – paragraph 2 – introductory part
Where AttrEmg are the attributed emissions of goods g, and ALg the activity level of the goods, the latter being the amount of goods produced in the reporting period in that installation, and EEInpMat are the embedded emissions of the input materials (precursors) consumed in the production process. Only input materials listed as relevant to the system boundaries of the production process as specified in the implementing act adopted pursuant to Article 7(6) are to be considered. The implementing act pursuant to Article 7(6) shall include all input materials that contribute significantly to GHG emissions. In the case of stainless steel (CN codes 7218-7223), ferro-alloys shall be included in the list of input materials as they fulfil this criterion. The relevant EEInpMat are calculated as follows:
Amendment 1276 #
Proposal for a regulation
Annex III – point 4 – paragraph 2
Annex III – point 4 – paragraph 2
For the purpose of determining default values, only actual values actual and best available data from the country where actual emissions took place shall be used. Best available data shall be ubased for, to the determination of embedded emissionsextent possible, on reliable and publicly available information on the type of technology and processes used, plant design, origin of input materials and simple goods used in the production process, energy source and other data. In the absence of actual data, literature values may be used. The Commission shall publish guidance for the approach taken to correct for waste gases or greenhouse gases used as process input, before collecting the data required to determine the relevant default values for each type of goods listed in Annex I. Default values shall be determined based on the best available data. Theyfor each type of good in Annex I with reference to main exporting countries based on EUROSTAT data. Default values shall be revised periodically through implementing acts referred to in Article 7(6) based on the most up-to-date and reliable information, including on the basis of information provided by a third country or group of third countries.
Amendment 1288 #
Proposal for a regulation
Annex III – point 4 – point 4.1 – paragraph 1
Annex III – point 4 – point 4.1 – paragraph 1
When actual emissions cannot be adequately determined by the authorised declarant, default values shall be used. These values shall be set at the average emission intensity of the 10 percent worst performing installations each exporting country and for each of the goods listed in Annex I other than electricity, increased by a mark-up, the latter to be determined in the implementing acts of this Regulation. When reliable data for the exporting country cannot be applied for a type of goods, the default values shall be based on the average emission intensity of the 105 per cent worst performing EU installations for that type of goods. Under no circumstances default values shall be lower than the likely embedded emissions and the exporter shall not benefit from the failure to provide reliable data on actual emissions so that default values are used. To that extent, the Commission shall apply a mark-up, the latter to be determined in the implementing acts of this Regulation.