Possible mitigation of the suspension of CBAM activities: The Commission
The representative of the European Commission suggested that the proposed regulation on the suspension of the EU Carbon Emissions Regulation Mechanism (CBAM) is unlikely to be implemented in its current form, as announced at an industry webinar on February 18, hinting at a negative reaction related to the fact that this provision undermines confidence in the work.
The webinar was organized by The Sustainable Procurement Pledge on CBAM readiness and best practices, and was attended by speakers from the European Commission and CBAMBOO, a consulting company specializing in the CBAM software platform.
Article 27a was presented as an amendment to the CBAM regulation as part of the Commission's proposal to expand the CBAM in December, and it authorizes the Commission to exclude goods from the scope of the regulation, which may be retroactive."[w]here, the Commission, taking into account relevant evidence, considers that the inclusion of the goods[ ]causes serious damage to the internal market of the Union due to serious and unforeseen circumstances related to the impact on the prices of goods."
Martin Becker, deputy head of the Directorate General for Taxation and Customs Union (DG TAXUD) unit responsible for CBAM, said that Article 27a was "very unlikely" to be implemented in its proposed form by EU co-legislators, explaining that the purpose of the measure was to protect against "truly extraordinary" circumstances, such as "war or pandemic", rather than from the more general inflationary impact of regulation on the EU market.
Becker's comments were in response to a statement from Gabriel Rosenberg, CEO of CBAMBOO, who questioned the logic of including a retroactive suspension clause in a system that is already plagued by many uncertainties and delays.
While the steel sector has not been as prominent as other sectors in calling for the suspension of CBAM for steel products, preferring instead to apply pressure to expand and more immediately extend to steel-consuming imports, visible flaws within the system could threaten to undermine companies' willingness to invest in CBAM preparedness.
Pauline Mikel, head of policy and research at CBAMBOO, spoke with McCloskey to clarify.:
"I am pleased to hear that the Commission has clarified the intentions behind article 27a and put an end to many of the speculations that we have seen in the markets as a result of the uncertainty. Clarifications on the legislative process were urgently needed.
"Importers of fertilizers, in particular, are extremely reluctant to join any international organizations.