The European Parliament is set to take a significant step in its fight against climate change with the adoption of the Carbon Border Adjustment Mechanism (CBAM).

The CBAM is a carbon tariff on carbon intensive products, such as cement, imported into the European Union. This important piece of the FitFor55 package aims to ensure a level playing field for European producers and incentivise the EU’s trading partners to switch to a more climate-friendly production.

The S&D Group has been at the forefront of the negotiations on this mechanism, a vital tool to support our industries and workers in the transition to climate neutrality. We have been leading the efforts to make this mechanism more ambitious and fit for purpose. Compared to the original Commission proposal, the CBAM will now have a broader sectoral scope and cover more indirect emissions than initially foreseen, which will increase the overall emission cuts.

Mohammed Chahim, S&D vice-president on Green Deal and rapporteur on CBAM, said:

"The adoption of the CBAM is a significant milestone in our fight against climate change. The mechanism will promote climate-friendly practices at international level, while ensuring a level playing field for European companies.

“A simple yet powerful principle has driven our hard work: the polluter must pay for their CO2 emissions, regardless of where they are produced in the world. With CBAM, payment for emissions will be a prerequisite for entry of products into the European single market.

“CBAM will be a crucial pillar of European climate policies. It is a singular mechanism to incentivise our trading partners to take climate action and contribute to the goals of the Paris Agreement. Additionally, it is an alternative to our current carbon leakage* measures, which will allow us to apply the ‘polluter pays’ principle to our own industry. A win-win situation!”

* Carbon-intensive companies based in the EU moving their production abroad to take advantage of lax standards, thereby shifting emissions outside of Europe and seriously undermining EU and global climate efforts.