Remarks by Executive Vice-President Séjourné and Commissioners Hoekstra at the press conference on the Clean Industrial Deal Package (including CBAM)
Commissioner Hoekstra
Ladies and gentlemen,
Good morning,
Thank you, Stéphane, for introducing the topic and for the great work and collaboration.
Many will be familiar with our Emissions Trading Scheme and the Carbon Border Adjustment Mechanism – better known as CBAM.The ETS puts a price tag on carbon produced within the EU.CBAM makes sure there is a level playing field – that we’re not asking anything more, or asking anything less for those goods that come into the EU.
And in doing so, we’re rewarding investments in low carbon.
The good news here, if you zoom out of this specific proposal, you will find that all over the world, geographies are embarking on pricing carbon.
We’ve seen that in Brazil, Mexico, the Chinese are doing it. They’re doing it in parts of the US and Canada.
It’s truly an idea for which the time has come, which makes it one of the most effective things to do in climate action.
For the EU, it makes sense to ensure that we balance the ETS with CBAM.
Ladies and gentlemen,
As you know, CBAM officially starts in January, putting a price on carbon in six sectors: iron, steel, aluminium, electricity, fertilizers, hydrogen.
But we have had a test period, and we have spoken to industry and Member States extensively.
Their feedback is clear: CBAM truly is a very good idea but it’s also like a good cheese with some holes in it.
We want to close these loopholes. And make sure the system works, that it’s simple, fair to everyone, in Europe and abroad, and that it’s effective.
The whole name of the game is to avoid carbon leakage.
We’re not going to ask anything more from others, than we’re asking from ourselves.
During the CBAM transition period, we learned important lessons. Our system was too broad, too clunky and had too many loopholes.
So first, we started by simplifying CBAM, taking 90% of companies out of scope while still covering 99% of emissions. I think that’s a very good step forward.
A more targeted scheme will ease compliance burden for thousands of companies while ensuring those that really matter are paying the price.
And now we are simplifying even CBAM further, offering additional flexibilities ahead of the January 1st implementation.
Today, we are coming with more measures aimed primarily at closing loopholes.
This is a strong ask from both business and EU Member States – and rightly so because it’s only fair.
We committed to this in the Clean Industrial Deal, and in the Steel and Metals Action Plan.
There are four main elements:
1. First, we’re addressing the risk of downstream carbon leakage.
This will cover only metal-intensive products and have very simple compliance rules. It will concern goods such as car doors, washing machines, kitchen and garden equipment. The aim is to avoid that, for example, a washing machine production in Poland moves to just outside the EU because CBAM on metal makes the washing machine more expensive. We want to avoid this.
This will increase CBAM revenues by 23% and generate as much as half a billion euros in revenue by 2030.2. Second, we’re strengthening CBAM with additional anti-circumvention safeguards.
We will be able to take strong anti-circumvention measures whenever we are confronted with evidence of fraud.
And obligatory country values will be used when it is necessary to tackle widespread evasion.
We should facilitate trade, but we should not facilitate fraud and evasion.3. Third, we’re simplifying the rules for electricity imports.
The aim is to calculate CBAM not on the marginal production but on average emission of the grid, to incentivise further decarbonisation.
We will also make technical adjustments to CBAM to facilitate market coupling when the relevant countries are ready.4. And fourth, we’re putting in place a temporary Decarbonisation Fund. This is very much linked to the conversation about exports.
using the money from national CBAM revenues
to address remaining carbon leakage risks
the fund will be there for 2 years (waiting for the next ETS review), refunding allowances paid in 2026/2027
with simple conditions linked to decarbonisation, in line with the ETS directive
and there will be no additional paperwork as reporting will be aligned with the ETS reporting. This is hugely important for those sectors high on exports outside the EU.Ladies and gentlemen,
These are important signals to our industry. Important signals on climate action. And they’re line with every decision we have taken from the first of December last year.
From day one, this Commission has stressed that we want to focus on a combination of climate, competitiveness, and independence.
Europe is a climate leader worldwide – but this also has to be fair for our businesses and people. Decarbonisation starts at home, but it’s fair to seek support from around the world.
We want our businesses, as well as businesses from outside thrive, to in a low-carbon economy.
Today’s proposals are an important step in that direction.
Thank you.
