EU finance ministers are considering the possibility of agreeing on amendments to the CBAM

Most countries are opposed to granting the European Commission overly broad powers to exempt certain goods from the scope of the CBAM

EU finance ministers are seeking to agree on a common position regarding legislative amendments to the CBAM. These amendments provide for extending the scope of the mechanism to cover a wider range of downstream products and introducing measures to prevent circumvention of the rules. The final amendments also more clearly define the European Commission’s powers to temporarily suspend the CBAM for sectors facing difficulties. This is reported by Argus.

The draft document, prepared ahead of the finance ministers’ meeting on 12 June, reflects the position of the majority, which opposed granting the European Commission overly broad powers to temporarily exempt certain goods from the CBAM (under the new Article 27a). Diplomats highlighted the risks of ‘weakening’ the effectiveness of the mechanism itself and the ‘vaguely defined’ limits of these powers.

To bridge the differences, Cyprus, which chairs the negotiations between diplomats, has set out specific conditions based on the previous draft under which the European Commission may suspend the CBAM. These include an average increase in import prices (unrelated to the CBAM) of more than 50% compared to the average cost of these goods over the last 10 years. Such a price increase must last for at least six months.

If finance ministers approve the text on 12 June, EU member states will be ready to begin negotiations with the European Parliament on the final draft legislation as early as this autumn. Cypriot diplomats suggested that Article 27a would remain in the European Council’s draft position as a ‘good basis’ for further negotiations.

During the first discussion, members of the parliamentary Committee on the Environment generally supported the removal of the new Article 27a. However, some MEPs still called for a partial or complete suspension of the CBAM. The committee is expected to vote on this issue on 6 July, with the full Parliament set to vote in early September.

Discussions surrounding the suspension of the CBAM intensified after the European Commission adopted an action plan on fertilisers last month. It provides for financial assistance to farmers and an assessment of options for creating strategic stocks of key types of fertilisers and raw materials.

As reported by GMK Center, Ukraine continues to seek ways to mitigate the impact of the CBAM on its economy. The main difficulties arise in communication with the European Commission, whilst the European Parliament generally supports Ukraine’s position.