Carbon border tax: hit emissions, not businesses

Today, the European Parliament voted in favour of simplifying the EU’s carbon border tax - a move that benefits both businesses and the environment, according to the EPP Group’s lead negotiator, Adam Jarubas MEP. “This is a good day for businesses across the EU, particularly SMEs, which depend on importing materials covered by the Carbon Border Adjustment Mechanism (CBAM). The Parliament supported the proposal to exempt over 90 per cent of businesses, some 182,000 importers, while keeping 99 per cent of emissions within the scope of CBAM,” Jarubas said.

The goal of the carbon border tax is to stop companies from moving production to countries with weaker climate rules. It does this by putting a price on carbon emissions linked to imported goods like cement, steel, aluminium, fertilisers, electricity, hydrogen, and other related products.

The EPP Group wants to ensure these new measures are feasible to implement, according to MEP Jarubas: “From the beginning, the EPP Group has called for a mechanism that would protect European producers without being too burdensome for other companies in the market.” 

“While working on the initial Regulation, the EPP Group called for the longest possible transition period, during which there are no payments, only reporting. Other political groups had wanted full implementation from the beginning of 2025, which would have been disastrous for many SMEs. We rejected that approach."

“The Commission made good use of the transition period to find weak spots in the Regulation and propose the right solutions. Imported goods under the threshold of 50 tonnes will be exempt from CBAM. Furthermore, authorisation, data collection and emissions verification rules will be more streamlined for importers who are subject to the new rules."

“These practical changes to CBAM make sense and are a welcome step in the right direction. The EU's focus should be on hitting emissions, not businesses," Jarubas said.