Sittings · Document

REPORT (COM(2025)0990 – C100353/2025 – 2025/0418(COD)) 2026-07-15

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

Committee on the Environment, Climate and Food Safety · Rapporteur: Pascal Canfin

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Parliament's amended version of the Commission proposal for a regulation establishing the Temporary Decarbonisation Fund. The Fund would give temporary financial support in 2027-2029 to operators and downstream operators in carbon-intensive sectors facing a remaining risk of carbon leakage, financed from 25% of revenues from the sale of CBAM certificates. It widens eligibility to downstream operators and to goods such as cement clinkers, cement, fertilisers and agri-food products, and requires beneficiaries to meet decarbonisation, labour-law and sourcing conditions. It allows a single application by 31 March 2028 or two applications, in 2027 and 2028, and sets deadlines for Commission decisions and disbursements. It requires Commission reports on the Fund, including an interim report by 31 March 2028 and a report by 31 December 2030, and possible legislative proposals by 31 December 2028.

Committee position. The committee proposes to strengthen the Fund by widening its scope to downstream operators and more goods, speeding up delivery through an optional two-call structure, and adding conditions on decarbonisation, labour rights and sourcing. It also seeks more reporting and predictability.

Key points

  1. The Fund would provide financial support in 2027-2029 to eligible operators and downstream operators for the remaining carbon leakage risk linked to goods produced and exported in 2026-2027.
  2. Support would be financed from the 25% of CBAM certificate sale revenues not accruing to the EU budget as an own resource, treated as external assigned revenue.
  3. Unused revenues could be reallocated as additional contributions to international climate finance under Article 9 of the Paris Agreement.
  4. Eligible goods would include those listed in the Annex and goods identified as facing a heightened remaining risk of carbon leakage, including cement clinkers, cement, fertilisers and certain agri-food products.
  5. Downstream operators using CBAM-listed goods as inputs could receive support if they show significant additional carbon-related costs and substantial exports or supplies to exporters.
  6. Operators and downstream operators would be excluded if they breach labour law or collective agreements, or if they or their parent company are established in listed non-cooperative tax jurisdictions.
  7. Support would be conditional on energy audits, climate-neutrality plans, verifiable emission reductions, and commitments to source half of equipment from the Union and not to use support for dividends, buybacks or executive bonuses.
  8. The Commission would calculate support using free allocation phased out, export shares and average EU ETS allowance prices, and for downstream operators using CBAM certificate prices.
  9. Applicants could submit a single application by 31 March 2028 or two applications, by 31 March 2027 and 31 March 2028.
  10. The Commission would adopt implementing decisions by 31 December 2027 and 31 December 2028, and disburse to Member States within one month.
  11. Member States and competent authorities would have to protect the Union's financial interests, prevent fraud and recover wrongly paid amounts.
  12. The Commission would report on the Fund, including an interim report by 31 March 2028, a report by 30 June 2028 on demand, and a report by 31 December 2030, and could propose extending or adapting the Fund by 31 December 2028.

Who is affected

  • Operators of EU ETS installations producing carbon-intensive goods for export, who could receive support.
  • Downstream operators using CBAM-listed goods as inputs, who could become eligible for support.
  • Small and medium-sized enterprises, for which simplified indicators and templates would apply.
  • Member States, which would transfer 25% of CBAM revenues and disburse support to beneficiaries.
  • Agri-food and fertiliser sectors, which could receive support for additional carbon-related costs.

Figures and deadlines

  • 25% of revenues from the sale of CBAM certificates would finance the Fund.
  • Support period 2027-2029, for production reference period 2026-2027.
  • Member States would communicate contributions by 31 July 2027 and 31 July 2028, and transfer by 30 September 2027 and 30 September 2028.
  • Applications: single application by 31 March 2028, or applications by 31 March 2027 and 31 March 2028.
  • Commission implementing decisions by 31 December 2027 and 31 December 2028.
  • Interim report by 31 March 2028; report on demand by 30 June 2028; final report by 31 December 2030.
  • Possible legislative proposal by 31 December 2028, including on a transaction fee.
  • Retroactive eligibility for actions undertaken from 1 January 2026 onwards.

Legal basis: Article 294(2), Article 192(1) and Article 322(1), point (a), of the Treaty on the Functioning of the European Union.

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