Brussels (Brussels Morning Newspaper) – On Tuesday, European Union nations supported plans to reduce the carbon border levy so that it applies to only 10% of the companies currently included in the scheme, as these businesses are responsible for nearly all of the emissions involved.
European Union member states need to finalise negotiations with the EU Parliament, which indicated last week that it supports the proposals. On Tuesday, ministers from these nations approved the suggested changes during a meeting in Belgium.
What changes did EU ministers approve this week?
The proposal aims to simplify and enhance cost-efficient compliance with the CBAM regulation while maintaining its climate objectives since nearly 99% of embedded emissions in imported CBAM goods would still be addressed. The primary goal is to lessen the regulatory and organisational burden along with compliance costs for European Union businesses, particularly small and medium-sized enterprises (SMEs).
The European Union‘s carbon border tax aims to protect EU producers from lower-cost competitors in nations with less stringent climate regulations. This tax will levy a charge on imported products that matches the carbon price paid by companies within the EU under its CO2 emissions regulations.
How does the new plan align with EU climate goals?
In February, the European Commission put forward changes aimed at relieving smaller businesses from burdensome bureaucracy, all while ensuring the environmental integrity of the approach since the remaining 10% of importers account for over 99% of the emissions addressed by it.
The carbon border tariff will impose costs on businesses importing over 50 metric tons annually of goods like cement, steel, aluminium and fertilisers.
This would supersede the current regulations, which require individuals or businesses importing goods valued over 150 euros to produce the levy starting next year. Commencing in 2027, firms must buy permits to account for the carbon emissions linked with importing outcomes from 2026.
