EU could hasten CBAM transition, ETS phase-out

The EU has updated its proposal for carbon border adjustment mechanism (CBAM) implementation to shorten the period of transition allowing companies to adapt to new regulations.

The bloc presented the first draft of a proposal to implement CBAM in July 2021. According to that first draft, the CBAM system was to become effective from 2023, with a transition period lasting until the end of 2025. In the revised proposal, the transition period could elapse at the end of 2024, according to an official document summary seen by Kallanish.

In addition, the initial CBAM proposal includes a phase-out of existing free EU Emissions Trading System (ETS) allocations to be concluded by 2035. The new proposal, however, foresees the conclusion of the free ETS allocation phase out in 2028.

The revised draft will be discussed in February and voted for by the end of April. The final agreement will need to be published by June.

Emanuele Norsa Italy