Italy seeks faster CBAM extension to downstream products
Italy is calling for a faster extension to the scope of the Carbon Border Adjustment Mechanism (CBAM) to downstream products, calling the current proposed start date of 1 January 2028 too distant, Minister of Enterprises and Made in Italy Adolfo Urso says.
The comments were made at a recent meeting in Rome with representatives from other ministries and industry associations, including Federacciai, Italy’s steelmakers’ association.
Urso noted that the scope of finished products covered by an expanded CBAM must be carefully defined to protect industrial value chains and avoid market distortions. He added that any potential inclusion of ferrous scrap should be considered. Clarity is also needed on how the temporary decarbonisation fund – designed to support exports – will operate, as well as any CBAM anti-circumvention mechanisms.
Regarding the review of the EU Emissions Trading System (ETS), Urso said it should take into account the first evidence emerging from CBAM and address existing market distortions, starting with excessive price volatility linked to speculation.
He added that for some energy-intensive sectors, climate neutrality remains technically and economically unachievable at present, effectively turning the ETS into an additional form of taxation. In this context, maintaining free allowances beyond 2034 would represent a balanced choice to recognise the efforts of companies already engaged in decarbonisation.
2026 must be the year of reform and a turning point. “The Commission now needs to take bold and pragmatic decisions to defend and revive European production in the most exposed sectors, such as automotive and energy-intensive industries,” Urso states in a ministry note obtained by Kallanish.
European Commission study on the potential extension of the scope of the CBAM to downstream products
European Commission Directorate-General for Taxation and Customs Union (TAXUD) is conducting a Study on a potential CBAM scope extension to downstream products.
The objective of this study is to assess the feasibility of extending the scope of the CBAM to products further down the value chain (downstream products) of the goods that are currently listed in Annex I of the CBAM Regulation (upstream CBAM basic goods).
The purpose of including downstream products is to mitigate the risk of carbon leakage of upstream CBAM basic goods as well as the downstream products.
As part of the study, they are carrying out a stakeholder survey. The aim of this survey is to gather both evidence and the views of relevant stakeholders on the major concerns, areas of consensus or points of contention as regards a CBAM scope extension to downstream products.
Particularly, input is sought on the administrative burden and costs importers of downstream products may face in complying with the CBAM if the scope were to be extended to downstream products.
The survey will be open from today until October 25th, 2024.
You can find the link to the survey here: CBAMScopeDownstream2024
Password: CB4M_d0wnstream
More background information n the objectives of the study can be found in the introductory section of the survey.