Activities of Seán KELLY related to 2021/0214(COD)
Plenary speeches (1)
Carbon border adjustment mechanism (A9-0160/2022 - Mohammed Chahim)
Amendments (110)
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 83 #
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 of carbon leakage resulting from the increased Union climate ambition. The CBAM is also consistent with the EU's objective of Open Strategic Autonomy.
Amendment 88 #
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 allocatExisting carbon leakage measures are based on strict benchmarks established by the best- performing installations. These measures also represents an incentive to reduce emissions under the EU ETS weakens the price signal that the system provideshile also providing a carbon price signal for emissions above the benchmark level; they have proven so foar the installations receiving it compared to full auctioning and thus affects the incentives for investment into further abatement of emissionso be effective in reducing the risk of carbon leakage, although in the context of lower carbon prices than those experienced recently and those forecasted by 2030.
Amendment 96 #
Proposal for a regulation
Recital 11
Recital 11
(11) The CBAM seeks to replacestrengthen carbon leakage protection in view of higher EU climate ambitions by 2030 and thereafter replace progressively 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 and by ensuring that EU products exported in the global market are not replaced by more carbon intensive products, which would undermine the objective of reducing global emissions. To ensure a gradual transition from the current system of free allowances to the CBAM, free allowances should only be phased out once the CBAM regulation has proven its effectiveness in terms of protection from the risk of carbon leakage both for imports and exports, not before 2030 and only following a three years test phase running from 2026 to 2028 during which the effectiveness of the mesure will be throughly assessed by the Commission. The combined and transitional application of EU ETS allowances allocated free of charge and of the CBAM should in no case result in more favourable treatment for Union goods compared to goods imported into the customs territory of the Union.
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 114 #
Proposal for a regulation
Recital 12 a (new)
Recital 12 a (new)
(12 a) While the surrenderingof 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 leakageassociated with European exports to third countries that have not yet limited or priced GHG emissions at the same levels as the EU.
Amendment 116 #
Proposal for a regulation
Recital 12 b (new)
Recital 12 b (new)
(12 b) This Regulation does not apply to goods exported from the EU and therefore does not address carbon leakage associated with exports. Consequently, the Commission should monitor and evaluate the mechanism’s impact on export markets and, if the assessment of the effectiveness of the CBAM in tackling carbon leakage on the EU market is positive, after the three year test period, the Commission shall present a report to the European Parliament and Council accompanied with a legislative proposal to address the carbon leakage risk on export markets while starting the free allocation phase out as set out in the ETS directive.
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 119 #
Proposal for a regulation
Recital 12 c (new)
Recital 12 c (new)
(12 c) If European industries producing goods subject to the CBAM face significant difficulties as a result of its implementation, the Commission develops an in-depth assessment in close collaboration with the industrial secotrs. This assessment should be completed as soon as possible to determine whether the mechanism is effective and practible.
Amendment 120 #
Proposal for a regulation
Recital 11
Recital 11
(11) The CBAM sneekds to replacecomplement these existing mechanisms by addressing the risk of carbon leakage in a differentbetter way, namely by ensuring equivalent carbon pricing for imports and domestic products while ensuring that the carbon pricing reflects the total embedded emissions of goods sold within the Union. To ensure a gradual yet rapid 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 transitionalpricing of all embedded emissions of good sold within the Union and subject to the CBAM, the number of CBAM certificates to be surrendered will gradually be raised following introduction of the CBAM. Also operators of installations subject to EU ETS will have to submit CBAM certificates for the emissions of goods sold domestically and not priced due to the granting of free allowances. The combined application of EU ETS allowances allocated free of charge and of the CBAM should in no case result in more favourable treatment for Union goods compared to goods imported into the customs territory of the Union.
Amendment 121 #
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. However, the CBAM should be combined with rules addressing the exports component, such as the implementation of full or partial export duty exemptions, in order to fully eliminate concerns of carbon leakage and protect the competitiveness of European exported goods. Such a mechanism would be in line with the rules provided by the WTO Agreement on Subsidies and Countervailing Measures (ASCM).
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 135 #
Proposal for a regulation
Recital 16 a (new)
Recital 16 a (new)
(16 a) 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.
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 20
Recital 20
(20) The CBAM system has some specific features compared with the EU ETS, including on the calculation of the price of CBAM certificates, on the possibilities to trade certificates and on their validity over time. These are due to the need to preserve the effectiveness of the CBAM as a measure preventing carbon leakage over time and to ensure that the management of the system idoes not add excessively burdensome administrative burden to EU companies in terms of obligations imposed on the operators and of resources for the administration, while at the same time preserving an equivalent level of flexibility available to operators under the EU ETS.
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 156 #
Proposal for a regulation
Recital 23 a (new)
Recital 23 a (new)
(23 a) Given the unique nature of the CBAM and the need forclose EU coordination, a CBAM authority at the EU level should be established to properly implement and monitor the provisions contained in this regulation.
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 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 52
Recital 52
(52) The Commission should evaluate the application of this Regulation before the end of the 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 prevent distortion of competition in the EU and in global markets and possibly extend the scope to indirect emissions, as well as to other goods and services at risk of carbon leakage, and to develop methods of calculating embedded emissions based on the environmental footprint methods47 . With regard to indirect emissions, the evaluation shall take into account the exposure of EU producers to carbon costs passed on in electricity prices due to the functioning of the EU energy market. _________________ 47 Commission 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 203 #
Proposal for a regulation
Recital 52
Recital 52
(52) The Commission should evaluate the application of this Regulation two years before the end of the transitional periodstart of removal of free allowances in ETS and report to the European Parliament and the Council. The re port of the Commission should in particular focus on the impact on competitiveness of the EU downstream industry and 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 prevent distortion of competition in the EU and on global markets and accordingly prepare a legislative proposal, possibly extend the scope to indirect emissions, as well as to other goods and services at risk of carbon leakage, and to develop methods of calculating embedded emissions based on the environmental footprint methods47 . _________________ 47 Commission 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 214 #
Proposal for a regulation
Recital 34
Recital 34
(34) However, aAluminium products should be included in the CBAM as they are highly exposed to carbon leakage. Moreover, in several industrial applications they are in direct competition with steel products because of characteristics closely resembling those of steel products. Inclusion of aluminium is also relevant as the scope of the CBAM may be extended to covalso covers indirect emissions. A specific benchmark for alumina product is needed to assess the value chain and ensure EU strategic autonomy for raw mater ialso indirect emissions in the future. . Embedded emissions understood as the emissions coming from the transformation of the product at the industrial site. Indirect emissions coming from raw material extraction and transformation should not be taken into account in the embedded emissions calculation so that it does not compete unfairly with secondary materials.
Amendment 216 #
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 232 #
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 235 #
Proposal for a regulation
Article 1 – paragraph 3
Article 1 – paragraph 3
3. The mechanism willshould progressively 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, if it has been proven to be effective in preventing carbon leakage both for imports into and exports from the Union’s custom territory, and without prejudice to maintaining EU ETS allowances free of charge at benchmark level until a test period with actual surrendering obligation by declarants running until 2030 has proven such effectiveness.
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 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 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 262 #
Proposal for a regulation
Article 2 – paragraph 12
Article 2 – paragraph 12
12. The Union, may conclude agreements with third countries with a view to take account of carbon pricing mechanisms in these countries in the application of Article 9. These agreements shall not lead to undue preferential treatment of imports from third countries as regards the CBAM certificates to be surrendered and they must not take into account any carbon pricing mechanisms that are considered to be circumvention practices under Article 27.
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 275 #
Proposal for a regulation
Recital 52 a (new)
Recital 52 a (new)
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 298 #
Proposal for a regulation
Article 8 – paragraph 3 – introductory part
Article 8 – paragraph 3 – introductory part
3. The Commission is empowered to adopt implementing acts concerning the principles of verification referred to in paragraph 1 as regards the possibility to waive the obligation for the verifier to visit the installation where relevant goods are produced and the obligation to set thresholds for deciding whether misstatements or non-conformities are material and concerning the supporting documentation needed for the verification report. Provisions laid down in such implementing acts shall be equivalent to the provisions set in Regulation 2018/2067.
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 304 #
Proposal for a regulation
Article 9 – paragraph 2
Article 9 – paragraph 2
2. The authorised declarant shall keep records of the documentation, certified by an independent person, verifier accredited pursuant to art. 18 and in line with the competences established in art. 8(1) concerning the verification of embedded emissions. The accredited verifier is required to demonstrate that the declared embedded emissions were subject to a carbon price in the country of origin of the goods and keep evidence of the proof of the actual payment for that carbon price which should not have been subject to an export rebate or any other form of compensation on exportation.
Amendment 313 #
Proposal for a regulation
Article 10 – paragraph 1
Article 10 – paragraph 1
1. The Commission shall, upon request by a register the information on operators of an installations located in a third country, register the information on that operator and on itsies and on those installations in a central database referred to in Article 14(4).
Amendment 317 #
Proposal for a regulation
Article 10 – paragraph 6
Article 10 – paragraph 6
6. The records referred to in paragraph 5, point (c), shall be sufficiently detailed to enable the verification in accordance with paragraph 5, point (b), and to enable any competent authority to verify and to review, in accordance with Article 19(1), the CBAM declaration made by an authorised declarant to whom the relevant information was disclosed in accordance with paragraph 8.
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 322 #
Proposal for a regulation
Article 10 – paragraph 8
Article 10 – paragraph 8
8. The operator may, at any timefter 5 years and with previous notification, ask to be deregistered from the database.
Amendment 325 #
Proposal for a regulation
Article 11 – title
Article 11 – title
11 Competent authoritiesy
Amendment 327 #
Proposal for a regulation
Article 11 – paragraph 1 – introductory part
Article 11 – paragraph 1 – introductory part
1. A central CBAM authority at the EU level is established for the purpose of implementing and managing this Regulation.Its composition and tasks shall be established by way of separate Regulation. Each Member State shall designate the national competent authority to carry out the obligations and cooperate with the EU CBAM authority under this Regulation and inform the CommissionEU CBAM authority thereof.
Amendment 331 #
Proposal for a regulation
Article 11 – paragraph 1 – subparagraph 1
Article 11 – paragraph 1 – subparagraph 1
The Commission shall make available to the Member States a list of all competent national authorities and publish this information in the Official Journal of the European Union.
Amendment 332 #
Proposal for a regulation
Article 11 – paragraph 2
Article 11 – paragraph 2
2. Member States shall require that national competent authorities exchange any information that is essential or relevant to the exercise of their functions and duties through a network established under the responsibility of the EU CBAM authority.
Amendment 337 #
Proposal for a regulation
Article 12 – title
Article 12 – title
Commissionpetent authorities
Amendment 339 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
The CommissionEU CBAM authority shall be assisted by the competent national authorities in carrying out their obligations under this Regulation and coordinate their activities.
Amendment 342 #
Proposal for a regulation
Article 13 – paragraph 1
Article 13 – paragraph 1
All information acquired by the central and national competent authorityies in the course of performing itstheir dutyies which is by its nature confidential or which is provided on a confidential basis shall be covered by an obligation of professional secrecy. Such information shall not be disclosed by the competent authority without the express permission of the person or authority that provided it. It may be shared with customs authorities, the Commission and the European Public Prosecutors Office and shall be treated in accordance with Council Regulation (EC) No 515/97.
Amendment 349 #
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 confidentialmade available to the public, unless it is proven that it is business confidential according to the relevant EU legislation. Non- confidential summaries must be included with confidential information. Information equivalent to the one made publicly available for EU producers under the EU ETS central database shall be made public.
Amendment 351 #
Proposal for a regulation
Article 14 – paragraph 4
Article 14 – paragraph 4
4. The CommissionEU CBAM authority shall establish a central database accessible to the public containing 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 public.The central database should insofar as possible, mirror the ETS database
Amendment 352 #
Proposal for a regulation
Article 15 – paragraph 1
Article 15 – paragraph 1
1. The CommissionEU CBAM authority shall act as central administrator to maintain an independent transaction log recording the purchase of CBAM certificates, their holding, surrender, re-purchase and cancellation and ensure coordination of national registries.
Amendment 355 #
Proposal for a regulation
Article 15 – paragraph 3
Article 15 – paragraph 3
3. If irregularities are identified as a result of the controls carried out under paragraph 2, the Commission shall inform the Member State or Member States concerned for further investigation in order to correct the identified irregularities. Identified irregularities shall be corrected as soon as possible from their identification and, where appropriate, penalties pursuant to article 27 shall apply.
Amendment 358 #
Proposal for a regulation
Article 16 – paragraph 1
Article 16 – paragraph 1
1. The national competent authority shall assign to each authorised declarant a unique CBAM account number which will be registered with the EU CBAM Authority.
Amendment 359 #
Proposal for a regulation
Article 17 – paragraph 1 – introductory part
Article 17 – paragraph 1 – introductory part
1. The national competent authority shall authorise a declarant who submits an application for authorisation in accordance with Article 5(1), if the following conditions are fulfilled:
Amendment 366 #
Proposal for a regulation
Article 17 – paragraph 2
Article 17 – paragraph 2
2. Where the national competent authority finds that the conditions listed in paragraph 1 are not fulfilled, or where the applicant has failed to provide the information listed in Article 5(3), the authorisation of the declarant shall be refused.
Amendment 367 #
Proposal for a regulation
Article 17 – paragraph 3
Article 17 – paragraph 3
3. If the national competent authority refuses to authorise a declarant, the declarant requesting the authorisation may, prior to an appeal, object to the relevant authority under national law, who shall either instruct the national administrator to open the account or uphold the refusal in a reasoned decision, subject to requirements of national law that pursue a legitimate objective compatible with this Regulation and are proportionate.
Amendment 368 #
Proposal for a regulation
Article 17 – paragraph 4 – introductory part
Article 17 – paragraph 4 – introductory part
4. A decision of the competent national authority authorising a declarant shall contain the following information
Amendment 370 #
Proposal for a regulation
Article 17 – paragraph 6 – introductory part
Article 17 – paragraph 6 – introductory part
6. The competent national authority shall require the provision of a guarantee in order to authorise a declarant in accordance with paragraph 1, if the declarant was not established throughout the two financial years that precede the year when the application in accordance with Article 5(1) was submitted.
Amendment 371 #
Proposal for a regulation
Article 17 – paragraph 6 – subparagraph 1
Article 17 – paragraph 6 – subparagraph 1
The competent national authority shall fix the amount of such guarantee at the maximum amount, as estimated by the competent authority, of the value of the CBAM certificates that the authorised declarant have to surrender, in accordance with Article 22.
Amendment 372 #
Proposal for a regulation
Article 17 – paragraph 7
Article 17 – paragraph 7
7. The guarantee shall be provided as a bank guarantee, payable at first demand, by a financial institution operating in the Union or by another form of guarantee which provides equivalent assurance. Where the competent national authority establishes that the guarantee provided does not ensure, or is no longer certain or sufficient to ensure the amount of CBAM obligations, it shall require the authorised declarant either to provide an additional guarantee or to replace the initial guarantee with a new guarantee, according to its choice.
Amendment 373 #
Proposal for a regulation
Article 17 – paragraph 8
Article 17 – paragraph 8
8. The competent national authority shall release the guarantee immediately after 31 May of the second year in which the authorised declarant has surrendered CBAM certificates in accordance with Article 22.
Amendment 375 #
Proposal for a regulation
Article 17 – paragraph 9
Article 17 – paragraph 9
9. The competent national authority shall revoke the authorisation for a declarant who no longer meets the conditions laid down in paragraph 1, or who fails to cooperate with that authority.
Amendment 376 #
Proposal for a regulation
Article 18 – paragraph 2
Article 18 – paragraph 2
Amendment 378 #
Proposal for a regulation
Article 18 – paragraph 3
Article 18 – paragraph 3
Amendment 380 #
1. The competententral and national authorityies may review the CBAM declaration within the period ending with the fourth year after the year in which the declaration should have been submitted. The review may consist in verifying the information provided in the CBAM declaration on the basis of the information communicated by the customs authorities in accordance with Article 25(2) and any other relevant evidence, and on the basis of any audit deemed necessary, including at the premises of the authorised declarant.
Amendment 382 #
Proposal for a regulation
Article 19 – paragraph 1 – point 1 (new)
Article 19 – paragraph 1 – point 1 (new)
(1) The national competent authority shall inform the EU CBAM authority of the quantity and installation source of the exports. The EU CBAM authority shall inform the Commission of the data received so as to allow the Commissionto to make adjustments to the allowances to be surrendered for the intallation source of the exports.
Amendment 387 #
Proposal for a regulation
Article 19 – paragraph 2
Article 19 – paragraph 2
2. Where a CBAM declaration in accordance with Article 6 has not been submitted, the competent authority of the Member State of establishment of the authorised declarant shall assess the CBAM obligations of that declarant on the basis of the information at its disposal and calculate the total number of CBAM certificates due at the latest by the 31 December of the fourth year following that when the CBAM declaration should have been submitted.
Amendment 408 #
Proposal for a regulation
Article 26 – paragraph 4 a (new)
Article 26 – paragraph 4 a (new)
4 a. In case of repeated failure to surrender a number of CBAM certificates corresponding to the emissions embedded in goods imported during the previous year, or in case of submission of false information in the CBAM declaration, an authorized declarant, and any of its related parties, maybe automatically excluded from the register for a given period from the date of exclusion. The respective verifier – and any of its related parties - who has certified the accuracy of the information in the CBAM declaration should have its certification withdrawn by the central CBAM authority.
Amendment 412 #
Proposal for a regulation
Article 26 – paragraph 5
Article 26 – paragraph 5
5. Member StatesThe central CBAM authority may apply administrative or criminal sanctions for failure to comply with the CBAM legislation in accordance with their national rules in addition to penalties referred to in paragraphs 2 and 4a. Such sanctions shall be effective, proportionate and dissuasive.
Amendment 417 #
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, 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.
Amendment 429 #
Proposal for a regulation
Article 27 – paragraph 3
Article 27 – paragraph 3
Amendment 434 #
Proposal for a regulation
Article 27 – paragraph 3 a (new)
Article 27 – paragraph 3 a (new)
3 a. Following a notification from a Member State, an interested party or on its own initiative, the Commission may decide, following an investigation, to extend obligations laid down in this regulation, in whatever way is necessary to prevent future circumvention of the mechanism, when circumvention of the measures in force is taking place.
Amendment 437 #
Proposal for a regulation
Article 27 – paragraph 5
Article 27 – paragraph 5
Amendment 445 #
Proposal for a regulation
Article 27 – paragraph 5 a (new)
Article 27 – paragraph 5 a (new)
5 a. Decisions referred to in the third paragraph shall be subject to theappeal procedure as set out in Article 30.
Amendment 446 #
Proposal for a regulation
Article 27 – paragraph 5 b (new)
Article 27 – paragraph 5 b (new)
5 b. The Commission shall always investigate possible circumvention when notified by a Member State or an interested party. Initiations shall be made by means of a Commission regulation which shall also instruct customs authorities of Member States to subject imports to registration. The Commission shall provide information to the Member States once a party or a Member State has submitted a request to initiate an investigation and the Commission has completed its analysis thereof, or where the Commission has itself determined that there is a need to initiate an investigation.
Amendment 449 #
Proposal for a regulation
Article 27 – paragraph 5 c (new)
Article 27 – paragraph 5 c (new)
5 c. Investigations shall be carried out by the Commission. The Commission may be assisted by customs authorities and the investigation shall be concluded in due time.
Amendment 453 #
Proposal for a regulation
Article 27 a (new)
Article 27 a (new)
Article 27 a Absorption 1. If any party submits sufficient evidence that, following the entry into force of this Regulation, an Authorised Declarant has been absorbing the cost of the CBAM Certificates, resulting in no or insufficient movement in the resale prices or subsequent selling prices of the imported product in the Union, and that such a situation has insufficient due cause or economic justification other than undermining the effects of the obligations as laid down in this Regulation, the Commission shall open an investigation. Once a party has presented sufficient evidence justifying the opening of an inquiry and the Commission hasfinished its study, the Commission will inform the Member States. 2. The investigation may also be opened, under the conditions set out in the first subparagraph, on the initiative of the Commission or at the request of a Member State. 3. During an investigation pursuant to this Article, any interested party shall be provided with an opportunity to clarify the situation with regard to resale prices and subsequent selling prices. 4. Investigations shall be carried out by the Commission. The Commission may be assisted by customs authorities and the investigation shall be concluded within in due time. 5. If it is concluded that the obligations as laid down in this Regulation should have led to movements in such prices, the Commission shall take appropriate measures to re-establish the effectiveness of the obligations as set out in this Regulation. Such measures imposed pursuant to this Article shall not exceed the amount of the penalties as set out in Article 26.
Amendment 473 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
2. Before the end of the 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, an in-depthe assessment ofdeveloped in cooperation with the sectors at risk of carbon leakage covered by this regulation of the rules to be applied in the testing period established pursuant art. 30bis and 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 as well as an assessment of the impact on competitiveness of the EU downstream industry. 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. Such an extension should be considered only if a clear calculation methodology has been established by the Commission and once the mechanism has proven fully effective in terms of achieving its objective of carbon leakage protection.
Amendment 481 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
2. Before the end of the transitional period,Two years before the start of removal of free allowances in ETS the Commission shall present a report to the European Parliament and the Council on the application of this Regulation. The report s hall contain, in particular, the assessment of the impact on competitiveness of the EU downstream industry, 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 489 #
Proposal for a regulation
Article 30 – paragraph 3 – subparagraph 1 (new)
Article 30 – paragraph 3 – subparagraph 1 (new)
A legislative proposal shall be presented two years before the start of removal of free allowances in ETS, to prevent distortion of competition in the EU and on global markets, that will occur as an indirect effect from the removal of free allocations of ETS, between products containing goods as listed under Annex I produced in the EU and those produced in third countries. The legislative proposal shall take into account Article 2.5 to prevent carbon leakage and be in line with WTO rules.
Amendment 494 #
Proposal for a regulation
Article 30 a (new)
Article 30 a (new)
Article 30 a Before phasing out free allocation to sectors at risk of carbon leakage covered by this rule, the Commission will monitor and assess the mechanism's efficacy in terms of the risk of carbon leakage. To this purpose, the Commission shall publish a report to the European Parliament and the Council, following consultation with the sectors subject by this Regulation,evaluating: a. the first three years (2026-2028) of thesurrendering obligation pursuant to article 22; b. the risk of carbon leakage on export markets. If the assessment is positive, the report shall be accompanied by a legislativeproposal to phase out free allocation to sectors subject to this regulation and to adopt a solution to mitigate the risk of carbon leakage on the export market.
Amendment 509 #
6. The Commission is empowered toshall adopt implementing acts concerning the information to be reported, the procedures for communicating the information referred to in paragraph 3 and the conversion of the carbon price paid in foreign currency into euro at yearly average exchange rate. The Commission is also empowered toshall adopt implementing acts to further define the necessary elements of the calculation method set out in Annex III, including determining system boundaries of production processes, emission factors, installation-specific values of actual emissions and their respective application to individual goods as well as laying down methods to ensure the reliability of data, including the level of detail and the verification of this data. The Commission is further empowered toshall adopt implementing acts to develop a calculation method for indirect emissions embedded in imported goods.
Amendment 542 #
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 547 #
Proposal for a regulation
Annex III – point 6
Annex III – point 6
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 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 688 #
Proposal for a regulation
Article 31 – paragraph 1 a (new)
Article 31 – paragraph 1 a (new)
1a. The authorised declarant shall surrender additional certificates equal to the number of certificates described in paragraph 1. However, in 2026 only10% of this number are to be surrendered, increasing each year by 10%, and reaching the full number in 2035.
Amendment 689 #
Proposal for a regulation
Article 31 – paragraph 1 b (new)
Article 31 – paragraph 1 b (new)
1b. Domestic operators of installations subject to the EU ETS shall be required to surrender CBAM certificates corresponding to embedded emissions of goods listed in Annex I and produced in these installations. The number of certificates to be surrendered equals the number to be surrendered by authorised declarants under paragraph 1a
Amendment 690 #
Proposal for a regulation
Article 31 – paragraph 1 c (new)
Article 31 – paragraph 1 c (new)
1c. The obligations in paragraphs 1a and 1b do not apply in respect of goods exported or processed into another product that is subsequently exported to a third-country.
Amendment 691 #
Proposal for a regulation
Article 31 – paragraph 1 d (new)
Article 31 – paragraph 1 d (new)
1d. The obligation in paragraph 1a applies to products imported as of 1 January 2026.
Amendment 693 #
Proposal for a regulation
Article 31 – paragraph 2
Article 31 – paragraph 2
2. The Commission is empowered to adopt delegated acts in accordance with Article 28 supplementing this Regulation by implementing acts laying down a calculation methodology for the reduction referred to in paragraph 1,providing for the standard format and the procedure for submitting the CBAM declaration and the arrangements for surrendering CBAM certificates as well as other measures necessary to integrate domestic producers into CBAM as provided under paragraph 1b, specifying if and to what extend Article 9 and corresponding delegated acts are applicable to paragraph 1b, and specifying when a CBAM good is processed into another product. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2).
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.