The European Parliament’s Committee on Environment, Public Health, and Food Safety (ENVI) discussed proposed revisions to the EU Carbon Border Adjustment Mechanism (CBAM), focusing on scope expansion, export support measures, industrial competitiveness, and safeguards against carbon leakage.
A major point of disagreement concerned Article 27(a), which would allow temporary emergency measures under exceptional circumstances. The S&D, EPP, Greens/EFA and The Left supported removing the article, arguing that it would create uncertainty for investors and weaken confidence in Europe’s decarbonisation framework. Meanwhile, PfE, ECR, and the European Commission defended the provision as a necessary safeguard in times of crisis.
Another key topic was the proposed Temporary Decarbonisation Fund aimed at supporting exporters facing carbon costs as free ETS allocations are phased out. Debate centred on how the fund should operate, including whether support should be linked to export volumes, whether one or two payment cycles should be introduced, and what environmental conditions beneficiaries should meet.
Several MEPs warned that European industries — particularly steel, aluminium, fertiliser and cement producers — risk losing competitiveness against third-country competitors not subject to similar carbon costs. At the same time, many speakers stressed that support mechanisms should remain temporary, targeted, and linked to genuine decarbonisation investments.
The discussion also focused on extending CBAM to additional downstream sectors and strengthening anti-circumvention measures to prevent carbon leakage and resource shuffling. Concerns were raised about unfair competition from imports of finished products and online platforms outside the EU.
The European Commission defended its approach to downstream expansion, stating that the selected sectors were chosen based on climate relevance and leakage risk while seeking to avoid excessive administrative burdens. However, the Commission opposed proposals to include pre-consumer scrap within CBAM rules, warning that this could create unintended consequences for other EU legislation.