The European Parliament votes for the extension of Cbam and new anti-tax avoidance measures

The European Cbam is preparing to broaden its range of action. The EU Parliament has approved its position on the new rules of the carbon border adjustment mechanism, asking to extend it to numerous finished products and to strengthen measures against avoidance.

The text, approved with 464 votes in favour, 50 against and 159 abstentions, now paves the way for negotiations with the member states.

The main innovation concerns the extension of Cbam beyond the raw materials currently involved. A wide range of downstream steel and aluminum products would come into the new scope, including fasteners, wire, springs and household items. Parliament proposes an even broader scope than that indicated by the European Commission.

MEPs are also calling for a crackdown on circumvention, lowering the threshold beyond which changes made to products can be considered an attempt to circumvent the mechanism. In the presence of proven practices, the Commission could apply the emission values ​​referring to the actual country of origin.

However, the Commission's proposal to be able to temporarily exclude some products from Cbam in the event of strong price shocks was rejected. Parliament prefers to allow, in these circumstances, a part of the proceeds of the mechanism to be allocated to the most affected sectors.

Green light also given to the position on the "Temporary Decarbonisation Fund", the fund intended to support the competitiveness of European producers on international markets. Parliament requests that it be operational from 2027 to 2029, bringing its start by a year earlier than the Commission's proposal.

The support would also be extended to fertilizers and companies that use products subject to Cbam and therefore have to bear higher costs related to CO2. The permitted products would include urea, ammonium nitrate and ammonium sulphate.

Parliament is now ready to start negotiations with member states to define the final text of the new rules.