MEPs Back EU Proposal to Simplify Carbon Leakage Rules

MEPs from the European Parliament have expressed their support for proposals aimed at simplifying the EU carbon leakage instrument. The new de minimis mass threshold of 50 tonnes is set to exempt 90% of importers from the EU carbon border adjustment mechanism rules while still maintaining the environmental goal of covering 99% of CO2 emissions from specific sectors.

The changes to the EU carbon border adjustment mechanism are part of efforts to reduce administrative burdens for small and medium-sized enterprises (SMEs) and occasional importers. The Committee on the Environment, Climate Change, and Food Safety has endorsed the Commission’s proposal, adopting technical amendments for clarification purposes. The proposed threshold would mainly benefit small importers who handle small quantities of CBAM goods.

Rapporteur Antonio Decaro highlighted the importance of limiting amendments to specific proposals by the Commission to prevent carbon leakage without weakening the CBAM. The text was adopted by MEPs with 85 votes in favor, 1 against, and 1 abstention. The Parliament is scheduled to adopt its mandate for negotiations with the Council on the legislation’s final shape on May 22, 2025.

The EU’s carbon border adjustment mechanism aims to equalize the price of carbon paid for EU products with that of imported goods, promoting higher climate ambition globally. The next steps involve assessing the extension of the CBAM to other ETS sectors at risk of carbon leakage. The changes are expected to streamline the authorisation process for importers and enhance anti-abuse provisions within the CBAM framework.