The European Parliament at its plenary session approved the extension of the carbon adjustment mechanism at the border (CBAM) to cover products for further processing, including additional steel-containing products proposed by the Committee on Industry, Research and Energy (ITRE).
The MPs also supported the creation of a fund to help businesses transition to a low-carbon economy. The list may include fasteners, wire, springs, and household goods — this is a broader list than the one originally proposed by the European Commission.
Parliament has also tightened the rules regarding circumvention of the mechanism. Now they will be applied only to schemes created specifically to avoid CBAM, and not to conventional commercial solutions related to cost reduction. In addition, the MEPs want to give the European Commission the right to apply the standard values of the country of origin if a circumvention scheme is identified.
The deputies rejected the initiative of the European Commission on a protective measure. It provided for the possibility of removing goods from the mechanism in case of sharp price fluctuations. Instead, the parliamentarians propose to temporarily channel the proceeds from CBAM to the affected industries.
Separately, the parliament approved the position on the temporary decarbonization fund, which should support EU producers in export markets. This document was adopted by 433 votes to 97, with 146 abstentions. The MPs insist that the fund's financing should be valid from 2027 to 2029, and not only from 2028, as proposed by the European Commission.
According to the Parliament, all processing companies that use goods subject to CBAM as raw materials should be eligible for support from the fund. The remaining funds can be used to fulfill the EU's international commitments on climate finance under the Paris Agreement.
Now the parliament will begin negotiations with the EU countries on the final version of the bill.
Eurofer welcomed the vote, calling the most important decision the expansion of CBAM to a larger number of steel products, including the list of priorities proposed by ITRE. The organization believes that a broader scope will complicate attempts to circumvent the mechanism by producing steel outside Europe and then importing finished products into the EU.
Eurometal also supported the expansion of CBAM to metal products, but warned that a significant part of steel-containing goods still remain outside the mechanism, creating possible loopholes. The association stated that global suppliers will shift production to categories that are not yet subject to fees, and move additional processing stages outside of Europe, while continuing to supply the market.