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EU bodies reach deal on carbon rules

EU member states and the European Parliament have agreed a provisional deal on proposals aimed at simplifying rules that target ‘carbon leakage’.

‘Carbon leakage’ occurs when EU-based companies move production abroad to take advantage of lower environmental standards, or when EU products are replaced by more carbon-intensive imports.

In February, the European Commission put forward measures to exclude small importers from obligations under the carbon border adjustment mechanism (CBAM).

The plan was part of a package of measures that the EU body said was aimed at simplifying EU rules and boosting competitiveness.

Simplification measures

An EU Council statement said that the agreement retained most of the elements of the European Commission proposal.

These include a broader exemption from CBAM obligations for importers who do not exceed a threshold set at a level of 50 tonnes of imported goods per importer per year.

In addition, the council and parliament agreed on several other simplification measures for all importers of CBAM goods above the threshold.

These are linked to the authorisation procedure, data-collection processes, the calculation of embedded emissions, the emission verification rules, the calculation of the CBAM declarants’ financial liability during the year of imports, and the claim by CBAM declarants for carbon prices paid in third countries where goods are produced.

The agreement must now be endorsed by the EU Council and the European Parliament before formal adoption, which is expected by September.