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MEPs vote down ETS proposal and postpone CBAM - Update -

(15 June) - UPDATE -

Today, the EPP, Renew Europe and Socialists & Democrats political groups reached an agreement on the ETS and CBAM files. They agreed on the following points:

  • Phasing out of free allowances in sectors covered by CBAM between 2027 and 2032 of 93% in 2027, 84% in 2028, 69% in 2029, 50% in 2030, 25% in 2031, and 0% in 2032.

  • Extension of CBAM to polymers, organic chemicals and hydrogen. Organic chemicals and polymers will be subject to a Commission assessment of the technical specificities. They also agreed to a timeline to include the other ETS sectors at risk of carbon leakage in the CBAM which will follow to same reduction path as the initial sectors.

  • An export rebate will be included for the EU production subject to carbon pricing. The Commission will assess the WTO-compatibility of the measure and make further proposals such as a green export rebate.

  • A slight raise of the reduction factor of carbon credits annually from 4.5% to 4.6% in 2029, arriving at an overall reduction of GHG emissions in ETS of 63% by 2030.

(9 June) During yesterday's plenary session, MEPs voted down the controversial ENVI ETS proposal and postponed the CBAM file. The proposals were badly received by industry for their overly ambitious targets, such as broadening the scope of CBAM to cover aluminium, hydrogen, polymers and organic chemicals and increasing the annual reduction of emission allowances.

The ENVI file on the Emissions Trading Scheme (ETS), which would end free allocations in 2026 and start the operation on CBAM in 2032 was in the end rejected by a majority of 340 votes against (mainly left parties) and 265 votes in favour (mainly right parties), plus 34 abstentions.

The text will now go back to the ENVI Committee and MEPs postponed the votes for the CBAM. The text will return in the plenary when a deal is secured. MEP Pascal Canfin, chair of the ENVI committee, said they will manage to sort out things and new negotiations may start in July.

To read the CRM-A position on the files, please click here.


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