The European Union (EU) has been at the forefront of discussions and actions related to the implementation of a Carbon Border Adjustment Mechanism (CBAM). This policy tool aims to address carbon leakage and create a level playing field for industries in the context of climate change and global trade. The timeline below provides an overview of the key milestones and developments in the EU’s CBAM policy process.
December 2019: European Green Deal Announced
The European Green Deal was unveiled by the European Commission in December 2019. It set the vision for the EU to become the world’s first climate-neutral continent by 2050 and outlined a range of policy measures to achieve this goal. The potential introduction of a CBAM was mentioned as a means to prevent carbon leakage and ensure fair competition.
March 2020: Carbon Border Adjustment Mechanism Mentioned in European Commission’s Industrial Strategy
The European Commission’s Industrial Strategy, released in March 2020, emphasized the need to address the risk of carbon leakage. It mentioned the possibility of a CBAM as a measure to promote the competitiveness of European industries while advancing climate goals.
July 2020: European Commission Launches Public Consultation
The European Commission launched a public consultation on the design of a CBAM in July 2020. Stakeholders, including businesses, industry associations, NGOs, and the general public, were invited to provide their inputs and insights on various aspects of the CBAM, including its design, scope, and potential impacts.
July 2021: European Commission Publishes Legislative Proposal
Building upon the inputs received during the public consultation, the European Commission published its legislative proposal for a CBAM in July 2021. The proposal outlined the main features and mechanisms of the CBAM, including the calculation of carbon emissions, the pricing mechanism, and the scope of coverage. The proposal aimed to align the CBAM with the EU’s broader climate and energy policies.
September 2021: European Commission Presents Proposal to the European Parliament and Council
The European Commission formally presented its CBAM proposal to the European Parliament and Council in September 2021. The proposal highlighted the EU’s ambition to lead the global fight against climate change and emphasized the need for a CBAM to ensure a fair and effective transition to a climate-neutral economy.
Ongoing Discussions and Debates: Since the presentation of the CBAM proposal, discussions and debates have been ongoing among EU member states, the European Parliament, and various stakeholders. Key topics of discussion include the scope of the CBAM, potential exemptions or phase-in periods, compliance mechanisms, and the impact on international trade relations.
2022-2023: Legislative Process and Implementation
Following the proposal’s presentation, the CBAM will undergo a legislative process within the EU institutions. This process involves negotiations, amendments, and potential revisions to the proposal. The aim is to reach a consensus among member states and the European Parliament, ultimately leading to the adoption of the CBAM legislation.
Once the CBAM legislation is adopted, the implementation phase will begin. This phase involves the development of technical guidelines, procedures, and mechanisms to ensure the effective functioning of the CBAM. It also includes the establishment of verification processes, cooperation with international partners, and the monitoring of impacts.
The specific timeline for the legislative process and implementation of the CBAM will depend on the progress and consensus achieved among EU member states and institutions. The EU aims to have the CBAM fully operational in the coming years, contributing to its climate objectives while ensuring fairness and competitiveness for European industries.
Conclusion:
The EU’s CBAM policy process has progressed significantly over the past few years, driven by the European Green Deal and the EU’s commitment to combating climate change. The timeline showcases the key milestones, including the announcement of the European Green Deal, the mention of the CBAM in the European Commission’s Industrial Strategy, the launch of a public consultation, the publication of a legislative proposal, and the presentation of the proposal to the European Parliament and Council. Ongoing discussions and debates are shaping the final design of the CBAM, with a focus on its scope, exemptions, compliance mechanisms, and trade implications.
As the legislative process and implementation phase unfold, the EU aims to establish a functioning CBAM that addresses carbon leakage, promotes fair competition, and aligns with its climate objectives. The timeline serves as a reminder of the EU’s commitment to lead the global fight against climate change and underscores the significance of the CBAM in achieving a climate-neutral economy.