Towards a WTO-compatible EU carbon border adjustment mechanism

08-03-2021 - 17:10
Carbon Border Adjustment Mechanism Carbon Border Adjustment Mechanism
Carbon Border Adjustment Mechanism © Adobe Stock

On 4 and 5 February ENVI adopted its own-initiative report entitled ‘Towards a WTO-compatible EU carbon border adjustment mechanism’, which addresses the creation of a carbon border adjustment mechanism (CBAM) as proposed by the European Commission in its Communication on the European Green Deal.

This new mechanism would place a carbon price on imports of certain goods from outside the EU, in order to reduce the risk of 'carbon leakage' which would counteract Europe's efforts to become climate-neutral by 2050. The reports calls for the introduction of a CBAM as part of a broader Union industrial strategy, which should cover all imports of products and commodities covered by the EU ETS, including when embedded in intermediate or final products. It also addresses issues linked to the design and scope of a CBAM. The Commission plans to present its legislative proposal on the CBAM in the second quarter of the year.