A representative for the European Commission suggested that a proposed suspension clause for the EU’s Carbon Border Adjustment Mechanism (CBAM) is unlikely to be implemented in its current form, as stated in an industry webinar 18 February, alluding to backlash that the provision undermines operational certainties.
The webinar was hosted by the Sustainable Procurement Pledge, on the topic of CBAM readiness and preparatory best practices, featuring speakers from the European Commission and CBAM software platform and consultancy, CBAMBOO.
Article 27a was presented as an inserted amendment to the CBAM regulation as part of the Commission’s CBAM extension proposal in December, and would authorize the Commission to remove goods from the scope of the regulation, potentially with retroactive effect, “[w]here the Commission, taking into account the relevant evidence, considers that the inclusion of a good […] causes severe harm to the Union internal market due to serious and unforeseen circumstances related to the impact on the prices of goods.”
Martin Becker, the Deputy Head of Unit of the Directorate-General for Taxation and Customs Union (DG TAXUD) responsible for CBAM, stated that Article 27a was “very unlikely” to be implemented in its proposed form by EU co-legislators, clarifying that the intention of the measure was to protect against “truly extraordinary” circumstances such as “war or a pandemic,” rather than the more general inflationary effect of the regulation on the EU market.
Becker’s comments were in response to speaker Gabriel Rozenberg, CEO of CBAMBOO, questioning the logic of embedding a retroactive suspension clause into a framework that has already been plagued by myriad uncertainties and delays.
While the steel manufacturing sector has not been as visible as other sectors in calling for a suspension of CBAM for steel goods, instead preferring to pressure for a broadened and more immediate extension to downstream steel-consuming imports, visible weaknesses in the framework could threaten to undermine companies’ willingness to invest in CBAM preparedness.
Pauline Miquel, Policy and Research Lead at CBAMBOO, spoke with McCloskey to clarify further:
“It’s great to hear the Commission clarify the intentions behind Article 27a and put to rest a lot of the speculation we have witnessed in the markets as a result of the uncertainties. Clarification on the legislative process was sorely needed.
“Fertilizer importers in particular have been extremely hesitant to engage in any kind of international transactions, and in some cases the noise has resulted in importers assuming that this clause is already in effect, when in reality we are still just at the proposal stage. This also touches on decarbonization investments, as producers globally are obviously unwilling to commit at scale if policy change will later invalidate their efforts.”
Ahead of last week’s European Industrial Summit in Antwerp, industry organizations including the Business for CBAM Coalition “represent[ing] industrial champions investing in clean hydrogen, ammonia, steel, and fertilizers both within and outside the European Union” singed a joint letter calling on the European Commission to remove Article 27a on similar grounds of operational and investment certainty.
ArcelorMittal recently confirmed intentions to proceed with their decarbonization investments at their Dunkirk plant (though at a reduced scale of development of only a single EAF, and no direct-reduced iron facilities), directly attributing the investment decision to CBAM’s improvement to the outlook for domestic industrial competitiveness.
Separately, Becker also addressed the delay to the drafting and official publication of relevant implementing acts, admitting that the drafting process had been more complex than anticipated, describing the context of uncertainty as “very bad” for European importers. The latest of the implementing acts on CBAM’s technical application (concerning the default values) was published in the EU’s Official Journal on the very last day of 2025, giving importers the minimum possible notice on official calculation metrics for their CBAM costs.
The regulatory delays were primarily caused by issues with the creation of the Commission’s default emissions values dataset – especially as relates to the iron and steel sector – which were consolidated from global public databases using a model designed by the Joint Research Centre.
The default values – both as embedded into official EU legislation and published in an excel file on the Commission’s CBAM webpages – contain errors, such as for steel imports from North Macedonia and Taiwan, China which Becker said would be fixed as soon as possible, though the legislative design of the regulation presents difficulties in how best to correct the values. Becker also stated that no substantive changes would be made to the default values at said time, as a result of engagement with industry stakeholders.
