What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

P10_TA(2026)0277

on the proposal for a regulation of the European Parliament and of the Council establishingEstablishing the Temporary Decarbonisation Fund

(COM(2025)0990 – C100353/2025 – 2025/0418(COD))

Committee on the Environment, Climate and Food Safety

PE785.408

Amendments adopted by the European Parliament on 15 September 2026 on the proposal for a regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund (COM(2025)0990 – C10-0353/2025 – 2025/0418(COD))

(Ordinary legislative procedure: first reading)

✦ Formal Drops the reference to consulting the Committee of the Regions.

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2025)0990),

– having regard to Article 294(2), Article 192(1) and Article 322(1), point (a), of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C100353/2025),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the budgetary assessment by the Committee on Budgets,

– having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Czech Chamber of Deputies and the Czech Senate, asserting that the draft legislative act does not comply with the principle of subsidiarity,

– having regard to the opinion of the Court of Auditors of 25 March 2026,

– having regard to the opinion of the European Economic and Social Committee of 19 March 2026,

– after consulting the Committee of the Regions,

– having regard to Rules 60 and 58 of its Rules of Procedure,

– having regard to the opinion of the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on the Environment, Climate and Food Safety (A10-0202/2026),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Recital 1: (1) The Union is committed to achieving climate neutrality by 2050 at the latest and negative emissions thereafter, which includes the objectives of reducing net greenhouse gas emissions by at least 55% by 2030 and 90% by 2040, in line with the European Green Deal4 and the European Climate Law5. The Clean Industrial Deal, as set out in the Commission Communication of 26 February 20256, underscores the need to align industrial competitiveness with climate ambition, ensuring that the transition to a climate-neutral economy is both just and economically resilient, while also maintaining the competitiveness of industrial sectors and averting the risk of carbon leakage. / 5 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (OJ L 243, 9.7.2021, p. 1, ELI: http://data.europa.eu/eli/reg/2021/1119/oj).

Proposal for a regulation Recital 17 b (new)

✦ Formal Updates the citation of Regulation (EU, Euratom) 2024/2509 and shortens the budgetary assessment reference.

Amendment: (17b) The implications of this Regulation for the Union budget have been assessed+ pursuant to Article 310(4) of the Treaty on the Functioning of the European Union. Sufficient financial and human resources should be provided for its implementation, while considering the impact of the financing on other Union programmes or policies and ensuring its compatibility with the multiannual financial framework, the system of own resources and the corresponding interinstitutional agreement, as well as with the budgetary principles laid down in Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council[1].2024/2509. / + Pro memoria: Budgetary assessment of the European Parliament’s Committee on Budgets of 23 June 2026 on the proposal for a Regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund (COM(2025)0990 – C100353/2025 – 2025/0418(COD)) / [1] Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj).2025/0418(COD)).

Article 1 – paragraph 2: 2. The Fund shall provide financial support in the period 2027-2029 to address the remaining risk of carbon leakage associated with carbon intensive goods produced and exported by eligible operators of installations and eligible downstream operators in the period 2026-2027.

Article 4 – paragraph 3: deleted.

✦ Adds annual Commission documentation of assigned revenue and disbursements, and an interim report by 31 March 2028 on the Fund's performance.

(The text of this provision is partially taken by amendment 40.)

Article 4 a – paragraph 1 (new): 1. From … [the date of entry into force of this Regulation], the Commission shall document, on an annual basis, detailed information about the collection and use of the assigned revenue referred to in Article 3(1) in the relevant working documents accompanying the draft budget of the Fund, as well as a detailed breakdown of funds disbursed under the Fund and applications per Member State, sector, goods and installations.

Article 4 a – paragraph 1 (new): 1. From … … [the date of entry into force of this Regulation], the Commission shall document, on an annual basis, detailed information about the collection and use of the assigned revenue referred to in Article 3(1) in the relevant working documents accompanying the draft budget of the Fund, as well as a detailed breakdown of funds disbursed under the Fund and applications per Member State, sector, goods and installations.

Article 4 a – paragraph 2 (new): 2. By 31 March 2028, the Commission shall carry out a comprehensive assessment and submit to the European Parliament and to the Council an interim report on the performance and effectiveness of the Fund in: / (a) preventing carbon leakage, including by assessing whether the current scope of eligible goods and sectors adequately reflects the sectors exposed to a risk of relocation of production outside the Union; / (b) supporting the level playing field of Union producers in third markets, and all goods covered by Directive 2003/87/EC and Regulation (EU) 2023/956; / (c) achieving verifiable emission reductions. / The interim report referred to in the first subparagraph shall evaluate in particular: / (a) the adequacy of the scope of this Regulation in terms of eligible goods or sectors on the basis of an updated assessment of the remaining risk of carbon leakage from those goods or sectors; / (b) the adequacy of the financial resources allocated to the Fund in light of its objectives and whether the available appropriations are commensurate with the demand for support by the sectors and installations concerned, on the basis of the applications received; / (c) consistency of the Fund with Union climate objectives, State aid rules, and the Union’s international obligations; / (d) the appropriateness of introducing a targeted transaction fee on the secondary EU ETS market, its effect on price stability and expected revenues for the Fund; / (e) an assessment of the effectiveness a…

✦ Replaces the interim report paragraph with a provision allowing the Commission to propose extending the Fund after 31 December 2029, adapting its scope or financial envelope, or introducing a transaction fee.

Article 4 a – paragraph 23 (new): 2. By 31 March3. 2028,On the Commission shall carry out abasis comprehensiveof assessmentthe andreports submitreferred to thein Europeanparagraphs Parliament1 and to2 theof Councilthis anArticle, interimthe reportCommission onmay, thewhere performanceappropriate, and effectiveness ofat the Fund in: / (a) preventing carbon leakage, includinglatest by assessing31 whetherDecember the2028, currentsubmit, scopetogether ofwith eligiblethe goodscorresponding andreport, sectorsa adequatelylegislative reflectsproposal theaccompanied sectorsby exposedan toimpact aassessment riskto, ofinter relocationalia: of/ production(a) outsideextend the Union; / (b)existence supportingof the level playing fieldFund ofafter Union31 producersDecember in2029, thirdtaking markets,into andaccount allthe goodsprovisions coveredof bythe Directive 2003/87/EC and Regulation (EU) 2023/956, / (c) achieving verifiable emission reductions. / The interim report referred to infor the first subparagraph shall evaluate inperiod particular:2031-2040; / (a) the adequacy(b) ofadapt the scope of thisthe RegulationFund in terms of eligible goods or sectors on the basis of an updated assessment of the remaining risk of carbon leakage from those goods or sectors; / (b) the adequacy(c) ofadapt the financial resources allocatedenvelope toof the Fund in light of its objectives and whether the available appropriations are commensurate withorder theto demandensure foradequate support by the sectors and installations concerned, on the basis of the applications received; / (c) consistency of the Fund with Union climate objectives, State aid rules, and the Union’sto internationaleligible obligations;operators; / (d) the appropriateness of introducingintroduce a targeted transaction fee on the secondary EU ETS secondary market, itssubject effectto onthe pricefindings stabilityin andthe expectedinterim revenuesreport, forwhile theexempting Fund;transactions /executed (e)solely anfor assessmentthe purpose of thecompliance effectivenessunder a…Directive 2003/87/EC.

✦ Drops the paragraph on the Commission's legislative proposal and adds a report by 31 December 2030 on the Fund's performance and expenditure.

Article 4 a– paragraph 3 (new): 3. On the basis of the reports referred to in paragraphs 1 and 2 of this Article, the Commission may, where appropriate, and at the latest by 31 December 2028, submit, together with the corresponding report, a legislative proposal accompanied by an impact assessment to, inter alia: / (a) extend the existence of the Fund after 31 December 2029, taking into account the provisions of the Directive 2003/87/EC for the period 2031-2040; / (b) adapt the scope of the Fund in terms of eligible goods or sectors; / (c) adapt the financial envelope of the Fund in order to ensure adequate support to eligible operators; / (d) introduce a transaction fee on the EU ETS secondary market, subject to the findings in the interim report, while exempting transactions executed solely for the purpose of compliance under Directive 2003/87/EC.

Article 4 a – paragraph 4 (new): 4. By 31 December 2030, the Commission shall present a report to the European Parliament and to the Council on the performance and the expenditure financed by the Fund. This report shall contain at least a detailed breakdown of funds disbursed by the Fund, applications and disbursement per Member State, sector, goods and installations, verifiable emission reductions achieved, and an evaluation of the Fund.

Article 4 a– paragraph 4 (new): 4. By 31 December 2030, the Commission shall present a report to the European Parliament and to the Council on the performance and the expenditure financed by the Fund. This report shall contain at least a detailed breakdown of funds disbursed by the Fund, applications and disbursement per Member State, sector, goods and installations, verifiable emission reductions achieved, and an evaluation of the Fund.

Proposal for a regulation Article 4 a – paragraph 5 (new)

(The text of this amendment is very similar to former Article 4(3) of the Commission proposal, which is proposed to be deleted by amendment 36).

Proposal for a regulation Article 4 a– paragraph 5 (new)

Amendment: 5. By 30 June 2028, the Commission shall present a report to the European Parliament and to the Council on the expenditure financed by the Fund covering the applications received, the sectors and installations concerned, the level of demand for support, and an assessment of whether the available appropriations are sufficient to meet that demand.

Article 8 – paragraph 2 a (new): 2a. For downstream operators, an application submitted pursuant to paragraph 1 shall be accompanied by the following specific elements: / (a) production data for the production reference period covered by the call for application referred to in paragraph 1 to verify the eligibility for financial support; / (b) the share of production sold in third countries broken down by country of export; / (c) if applicable, a tax transparency report and an ownership structure disclosure providing evidence that the operator and its parent company are not established in jurisdictions listed in the Union list of non-cooperative jurisdictions for tax purposes.

✦ Formal Adds a footnote reference and the full citation of Directive 2013/34/EU.

Article 8 – paragraph 2 b (new): 2b. SMEs, as defined in Directive 2013/34/EU of the European Parliament and of the Council,Council1a, shall not be required to update their existing climate-neutrality plans, verified climate-neutrality report, energy audit, certified Energy Management System or certified Environmental Management System incompliance with CISAF, solely for the purpose of receiving support from this Fund. / 1a Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19, ELI: http://data.europa.eu/eli/dir/2013/34/oj).

Article 8 – paragraph 2 c (new): 2c. Within 15 days of reception of the application referred to in paragraph 1, the Commission shall assess the completeness of the information provided by the applicant which is necessary to evaluate the eligibility of the operator and the downstream operator for support under the Fund. If before the end of 15 days, the Commission assesses that the information provided by the applicant is incomplete or insufficient to conclude the evaluation of its request, the applicant shall be requested to submit complementary information within 15 days. Following an acknowledgment of completeness, the applicant shall not be asked to provide any new information unless duly justified.

Article 8 – paragraph 3 b (new): 3b. Following the conclusion of the decisions referred to in Article 10(3), the Commission shall make the relevant documentation, evidence and plans submitted to the Commission, by operators and downstream operators, pursuant to this Article, publicly available. This shall be done in accordance with the applicable Union law on the protection of personal data, as well as commercially sensitive information and trade secrets, in particular pursuant to Regulation (EU) 2018/1725 of the European Parliament and of the Council1a and Directive (EU) 2016/943 of the European Parliament and of the Council1b, respectively. / 1a Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39, ELI: http://data.europa.eu/eli/reg/2018/1725/oj). / 1b Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ L 157, 15.6.2016, p. 1, ELI: http://data.europa.eu/eli/dir/2016/943/oj).

✦ Wording Replaces dashes with commas around the phrase on relevant competent authorities.

Article 8 – paragraph 4: 4. The Commission shall assess -assess, with the support of relevant competent authorities -authorities, the documentation provided in accordance with paragraph 2. Based on that assessment, the Commission shall decide whether the conditions set out in Articles 6 and 7 have been met. It shall recover funds if the conditions were not met and bring legal proceedings where necessary in that regard.

Article 8 – paragraph 5: 5. By 30 June 2027 and 30 June 2028, the Commission shall establish a list identifying all the applicants that applied for support by 31 March 2027 and 31 March 2028, respectively, that meet the conditions as determined in accordance with paragraph 4, their respective installations and the level of support calculated in accordance with Article 9.

Article 10 – paragraph 1 – introductory part: 1. Upon establishing the list referred to in Article 8(5), the Commission shall perform the following actions:

✦ Formal Replaces a closing bracket with a semicolon in the cross-reference to Article 9.

Article 10 – paragraph 1 – point a: (a) review the calculation performed pursuant to Article 9(1), (1a), (1b) and (1c)(1c);

Article 10 – paragraph 1 – point b: (b) assess the inclusion of each operator, installation and downstream operator in the list;

Article 12 – paragraph 1: 1. Member States, as beneficiaries of funds under the Fund, and relevant competent authorities shall take all the appropriate measures to protect the financial interests of the Union and to ensure that the use of the financial allocations complies with applicable Union and national law, in particular regarding the prevention, detection and tackling of fraud, corruption, conflicts of interests and all other irregularities affecting the financial interests of the Union. To that effect, Member States shall take any necessary measures to prevent wrongful payouts and for the recovery of amounts wrongly paid. Member States shall rely on their national budget management, control and recovery systems.

✦ Wording Changes 'The' to 'the' at the start of the sentence on Commission verification.

Article 12 – paragraph 2 – point a: (a) that Member States take appropriate measures to prevent, detect and tackle fraud, corruption, conflicts of interests, non-compliance and all other irregularities affecting the financial interest of the Union within the meaning of Article 61 of Regulation (EU, Euratom) 2024/2509 and to take legal action to recover funds that have been unduly spent or misappropriated; Thethe Commission, with support of the Member State relevant competent authorities, shall verify that the final beneficiaries have used the financial support to carry out the investments and that they have complied with the conditions referred to in Article 7;

Article 12 – paragraph 2 – point e: (e) to expressly authorise that the Commission has the right to reduce the financial support under the Fund proportionately and recover any amount due to the Union budget, in cases of fraud, corruption, conflict of interests, non-compliance or any other irregularity affecting the financial interests of the Union.

EXPLANATORY STATEMENT

The Carbon Border Adjustment Mechanism (CBAM) forms an integral part of a broader European industrial and climate strategy. Its core objective is to strengthen the European Union’s capacity to deliver ambitious climate action while preserving a robust industrial base. By ensuring that European industries covered by the EU Emissions Trading System (ETS) compete on fair terms with international producers, CBAM contributes to creating a level playing field. Ultimately, it aims to stimulate decarbonisation investments within the EU, enhance industrial resilience, and reduce structural dependencies on imported fossil fuels.

The transitional phase of the CBAM has highlighted both the relevance of the instrument and the need to improve its functioning. In particular, it has revealed residual risks of carbon leakage affecting certain sectors. These risks arise notably from the progressive reduction of free allowances under the ETS and from cost pressures on raw materials, especially when European producers compete with operators not subject to equivalent climate constraints abroad. In this context, the European Parliament called on the Commission to develop a targeted response already early in the process of the CBAM creation. The Temporary Decarbonisation Fund (TDF), as proposed by the Commission, constitutes such a response and is therefore strongly welcomed.

The Fund should however not be considered as a standalone solution. It can provide meaningful support to parts of European industry in their decarbonisation efforts, but its effectiveness depends on its integration within a coherent and comprehensive policy framework. In this framework, the ETS must remain the central driver of EU climate policy, ensuring a strong, stable and credible carbon price signal. Complementary instruments – including the European Competitiveness Fund and the future Decarbonisation Bank – must act as key enablers of industrial transformation. In parallel, the CBAM should continue to evolve and expand, providing a stable and predictable environment for long-term decarbonisation investments.

Against this background, the Rapporteur proposes to strengthen the Fund so that it becomes larger in scope, faster in delivery, and more predictable in its functioning, thereby ensuring that it is fully fit for purpose and capable of contributing to the broader aim to better channel investment into decarbonisation.

1/A stronger fund

The Commission proposal limits eligibility to operators directly covered by the ETS. While this constitutes a logical starting point, it fails to account for the transmission of carbon costs along value chains. In practice, many economic actors are indirectly but significantly affected by both the ETS and CBAM. This is particularly the case for downstream operators, such as small and medium-sized enterprises in steel value chains or agricultural actors facing rising input costs, notably for fertilisers. These operators are exposed to carbon cost increases without being directly covered by the ETS and, therefore, without access to support under the current proposal. To address this gap, the Rapporteur proposes the creation of a specific category of downstream operators. These would include entities not directly covered by the ETS but producing goods falling within the scope of this Regulation and facing a demonstrable cost increase linked to CBAM-covered inputs.

For these downstream operators, the carbon cost push criterion, already used in the context of the CBAM extension to downstream products, appears particularly relevant. This indicator – reflecting both direct and indirect carbon cost increases relative to gross value added, combined with trade intensity – provides a robust and objective basis for calibrating the level of financial support. Furthermore, in order to ensure that the Fund effectively supports the decarbonisation transition rather than merely compensating for competitiveness losses, access to support should be conditional upon credible climate commitments. These conditionalities should, however, be proportionate and adapted to the specific capacities and constraints of smaller downstream operators.

In addition to the extension of the fund for the downstream operators, the rapporteur proposes to expand the product scope of the Fund in order to better target the value chains at risk and does so by using a 25% trade intensity criteria instead of 30%.

2/A faster, simpler and more flexible instrument

Under the Commission proposal, the TDF is designed as a one-off instrument, with a single application and a single disbursement, expected by the end of 2029. However, the phase-out of free allowances and the implementation of CBAM began as of 1 January 2026, meaning that operators are already bearing additional carbon costs today. Providing compensation only several years later risks undermining both the economic effectiveness, especially for SMEs that may likely be in the scope now given the modification of the eligible operator that the rapporteur proposes. In this context, the Rapporteur proposes an optional two-call structure, without prejudice to the single-call option for companies that prefer it:

· A first call for applications with a submission deadline of 31 March 2027, allowing a first payment in 2027 – enabling compensation for costs incurred in 2026.

· A second call for applications, following the original Commission timeline, would then cover costs incurred in 2027 and subsequent years.

Companies would retain full flexibility to choose whether to participate in one or both calls, or to wait for the single-call option. This two-step approach responds to the need for simplification and acceleration of European instruments, as highlighted notably in the Draghi report, while accommodating the diversity of administrative capacities across companies. In parallel, the Rapporteur proposes to shorten the procedural timelines applicable to both national competent authorities and the Commission, in order to ensure a more timely delivery of support.

3/A safer and more predictable framework

A key objective of the Rapporteur’s amendments is to enhance predictability for economic operators.

· First, as regards exports, the Rapporteur proposes to clarify that the Fund will support only the share of production that is effectively exposed to carbon leakage risks on markets outside the European Union. This clarification improves transparency and legal certainty for businesses. At the same time, to avoid any risk of the Fund being perceived as an export subsidy mechanism, it is clearly specified that climate conditionalities apply to all beneficiaries, irrespective of their market orientation.

· Second, the proposal strengthens the predictability of revenue use. The Commission proposal already introduces an important innovation by earmarking CBAM revenues for supporting decarbonisation in ETS and CBAM-covered sectors. This represents a first step towards a more strategic and effective use of carbon pricing revenues at EU level. This is particularly relevant in light of the current underperformance in the use of ETS revenues by Member States in supporting industrial decarbonisation. The TDF therefore constitutes a meaningful step ahead of the forthcoming broader review of EU climate legislation.

4/The specific case of farmers and fertilisers

In the short term, the introduction of CBAM leads to an increase in the price of fossil-based fertilisers imported into the EU. Many farmers remain highly dependent on these inputs and face limited short-term alternatives. This situation creates immediate cost pressures, particularly for agri-food operators active on international markets, where the ability to pass through additional costs is limited. In this context, suspending the CBAM for the fertiliser sector, as provided by the Article 27a proposed by the Commission is not a solid answer since it brings about an enormous uncertainty for investors and companies investing in the decarbonisation of the fertiliser industry within the EU. It is the wrong answer to a real problem.

However, the impact on agriculture is real, and looking to offset the additional cost for the exporting part of our agriculture while investing in our own EU and decarbonised fertiliser industry makes a lot of sense. It is therefore justified to extend access to the Fund to certain agri-food operators in that perspective, notably those producing export-oriented cereals such as wheat and barley. These sectors are directly exposed to competitiveness losses resulting from increased upstream carbon costs. For these operators, conditionalities should be specifically tailored. Rather than imposing immediate and potentially unrealistic decarbonisation requirements, support should prioritise measures that contribute to reducing fertiliser use in the short term. This approach should be understood as a transitional measure, addressing immediate competitiveness challenges, and should not substitute for the broader structural objective of reducing fertiliser dependency in European agriculture and fostering the development of a competitive market for low-carbon and European-produced fertilisers. Finally, it should be highlighted that carbon price is only a fraction of the additional cost related to energy prices surge and that the long-term solution is to decrease our level of dependency on carbon intensive imports.

Conclusion

With these adjustments, the Rapporteur considers that the Temporary Decarbonisation Fund can deliver genuine added value within the EU’s climate and industrial policy framework. By improving its scope, speed, and predictability, the Fund can strengthen the effectiveness of the CBAM, support the decarbonisation of European industry, and contribute to enhancing the sovereignty, resilience, and strategic autonomy of the European economy.

BUDGETARY ASSESSMENT OF THE COMMITTEE ON BUDGETS

for the Committee on the Environment, Climate and Food Safety

on the proposal for a regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund

(COM(2025)0990 – C100353/2025 – 2025/0418(COD))

Rapporteur for budgetary assessment: Danuše Nerudová

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

The Committee on Budgets,

A. whereas the proposed Temporary Decarbonisation Fund (TDF) complements the EU Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) by providing financial support to operators in energy intensive sectors facing a remaining carbon leakage risk;

B. whereas the proposed measure is targeted, limited in volume and temporary until a more structural solution to the carbon leakage problem is devised by the upcoming revision of the ETS;

C. whereas the Member States are to transfer 25 % of their CBAM revenues to the Commission in 2028 and 2029; whereas these contributions are to be treated as external assigned revenue to fund the new budget line for the TDF;

D. whereas Parliament has repeatedly called for the CBAM to serve as the basis for a new EU own resource; whereas the latest Commission proposal for a new system of own resources includes the introduction of a new own resource based on the CBAM; whereas the Council has still not adopted the CBAM as an own resource five years after the Commission first proposed this in 2020;

E. whereas the Commission is to present a report on the implementation of the TDF to Parliament and the Council by 31 December 2030;

F. whereas on numerous occasions, Parliament has highlighted the challenges associated with the treatment of external assigned revenue in terms of budgetary transparency and procedural accountability;

1. Considers that the rationale and the operating principles of the TDF illustrate how the EU budget can be used to pursue the Union’s climate objectives, while improving the competitive position of the EU industrial sectors that are sensitive to the carbon leakage dilemma; underlines that any support mechanism must safeguard the competitiveness of EU industry and preserve a level playing field on the global market; deeply regrets, in this context, the fact that the Just Transition Fund is not included in the Commission’s proposal for the 2028-2034 multiannual financial framework (MFF), as it previously played a key role in supporting vulnerable regions and households, particularly those where energy-intensive industries are often located, in the transition towards decarbonisation; underlines the importance of ensuring that support for the transition remains targeted, efficient and consistent with the principles of sound financial management;

2. Welcomes the fact that public revenue, which is generated through the implementation of EU legislation and the enforcement of EU regulations such as the CBAM Regulation, is used to finance expenditure at EU level, albeit outside the EU own resources system;

3. Welcomes the proposed share of 25 % of CBAM proceeds to be made available by the Member States, as it is compatible with the Commission’s proposal to use 75 % of proceeds from the CBAM as own resources for the general budget, and with Parliament’s established position on own resources;

4. Suggests that a similar accompanying initiative be launched under the relevant external development instruments to further accelerate the decarbonisation of carbon-intensive industries in least developed countries, in compliance with the EU’s international commitments, in particular the Paris Agreement, and to ensure better policy coherence, in this regard;

5. Confirms that expenditure financed by external assigned revenue is not counted against MFF ceilings and that therefore, by default, the proposal is compatible with the current and 2028-2034 MFFs;

6. Recalls that one quarter of the CBAM revenue collected by Member States in this very early phase of implementation will yield only around EUR 300 million to EUR 350 million per year; recalls that this revenue is also intended to cover a modest amount of administrative support costs, which means that only around EUR 600 million will be available for calls for applications under the TDF in 2028 and 2029; estimates that these amounts might be marginally higher if the extension of the scope of the CBAM Regulation to certain downstream products will have taken effect by then;

7. Considers that any revenues remaining after full disbursement should be reused to support the decarbonisation of energy-intensive industries; calls on the Commission, in that regard, to submit, by 31 March 2030, a legislative proposal providing for the use of such revenues to grant additional support to operators in the sectors covered by this regulation, in accordance with the objectives set out in Article 1 thereof;

8. Calls on the Commission to present, by December 2028, an implementing report covering the applications received, the sectors and installations concerned, the level of demand for support, and an assessment of whether the available appropriations are sufficient to meet that demand; calls on the Commission, on the basis of that report, to assess whether a prolongation of the programming period is necessary; further calls on the Commission, in that context, to assess whether the monitoring, verification and reporting obligations provided for in the regulation are being implemented in a manner that takes account of the size, resources and administrative capacity of undertakings, in particular small and medium-sized enterprises, thereby avoiding unnecessary administrative burdens;

9. Recalls that the earmarking of revenue for particular spending purposes is to be avoided as a matter of principle; acknowledges, however, that the temporary nature and specific purpose of the TDF justifies an exception to the principle of universality of revenue; recalls that, in order to avoid the risks of a ‘shadow fund’ and the proliferation of the ‘budgetary galaxy’, assigned revenue must be subject to additional scrutiny and transparency provisions; insists, therefore, that the Commission report comprehensively and from the outset on the implementation of the fund; requests, more specifically, a detailed description and periodic documentation within the framework of the annual budgetary procedure, and in particular in the working document (Part V) accompanying the draft budget, dedicated to assigned revenue;

10. Asserts that new budget lines must be introduced and approved by the budgetary authority, both on the revenue and expenditure sides of the budget and for operational and administrative expenditure;

11. Takes note of the estimated administrative costs of approximately EUR 1 million per year, and the fact that these are to be covered by redeployment in 2026 and 2027, and by external assigned revenue once available until 2031;

12. Emphasises that the new fund, even though it is temporary and financed by external assigned revenue, is subject to legal provisions protecting the financial interests of the Union, such as the rule of law conditionality; insists that the protective measures to prevent fraud and irregularities set out in Article 12 of the proposal must not be weakened in the course of interinstitutional negotiations.