Sittings · Document

DRAFT OPINION (COM(2025)0989 – C100352/2025 – 2025/0419(COD)) 2026-03-19

On the proposal for a regulation of the European Parliament and of the Council on amending Regulation (EU) 2023/956 as regards the extension of its scope to downstream goods and anti-circumvention measures

Committee on International Trade · Rapporteur: Lynn Boylan

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The Committee on International Trade's draft opinion responds to the Commission's proposal to extend the Carbon Border Adjustment Mechanism (CBAM) to downstream goods and add anti-circumvention measures. The rapporteur welcomes parts of the proposal but proposes amendments to support developing trade partners, exempt Least Developed Countries (LDCs) from CBAM financial obligations while keeping reporting duties, and direct at least 25% of CBAM revenues to international climate finance. The draft opinion deletes Article 27a, which would let the Commission remove goods from CBAM scope in serious and unforeseen circumstances, calling it legally unsound and a risk to predictability. It adds new articles on technical assistance, CBAM diplomacy, an impact report on developing countries, technology transfer, and support for international climate action.

Committee position. The rapporteur welcomes parts of the Commission proposal but proposes amendments to support developing countries, exempt LDCs from financial obligations, direct 25% of CBAM revenues to climate finance, and delete Article 27a as legally unsound and a risk to predictability.

Key points

  1. The rapporteur welcomes the Commission proposal's elements that close loopholes and address practical issues while respecting the CBAM Regulation's logic.
  2. The Commission should provide technical assistance to third countries, particularly lower-middle-income countries (LMICs) and least developed countries (LDCs), on monitoring, reporting and verification (MRV), emissions accounting and carbon pricing.
  3. LDCs would be exempt from CBAM financial obligations under Article 22 but remain subject to reporting requirements under Article 10; simplified reporting would apply to LDCs and small and medium enterprises in LMICs.
  4. The Commission should regularly report on CBAM's impacts on developing countries' economies, their ability to comply, and its contribution to industrial decarbonisation and climate policies.
  5. The Commission should direct an amount equivalent to at least 25% of CBAM revenues towards additional international climate finance, separate from existing commitments.
  6. The Commission should promote technology transfer of low-emission technologies, including through WTO rule adaptation and partnerships between EU and developing-country producers.
  7. Article 27a is deleted: the rapporteur calls it legally unsound and politically untenable, saying it would undermine CBAM, expose the EU to external pressure and pose financial risk through retroactive application.
  8. The Commission should engage with third countries and multilateral fora on carbon pricing and decarbonisation, and trade agreements should not exempt or reduce CBAM obligations or allow rebalancing measures.
  9. The Commission should consider dual carbon pricing schemes, where exports covered by CBAM face a carbon export tax in addition to the carbon price paid in that country.
  10. Recognition of third countries' electricity market coupling should be subject to human rights and sustainability criteria, put forward by a Memorandum of Understanding with the Commission.
  11. The annual assessment of the mass-based threshold in 2027 should also cover downstream goods, and the Commission should monitor impacts on LMICs and LDCs, including their decarbonisation progress and export effects.
  12. The scope of CBAM is an essential element and should not be amended by delegated act; the phase-in of CBAM must remain aligned with the phase-out of free allocation under the EU ETS.

Who is affected

  • Least developed countries: exempt from CBAM financial obligations but must still report emissions.
  • Lower-middle-income countries and their small and medium enterprises: simplified reporting procedures and technical assistance.
  • EU trading partners: clearer rules, carbon pricing dialogue, and no exemptions in trade agreements.
  • The north of Ireland: clarity sought on CBAM application and ETS linking via a Memorandum of Understanding.
  • EU industry and importers: extended CBAM scope to downstream goods and anti-circumvention measures.

Figures and deadlines

  • At least 25% of CBAM revenues to be directed to additional international climate finance.
  • Annual assessment in 2027 of the mass-based threshold, covering downstream goods.
  • Impact Report on developing countries due by 1 January 2028 and every two years thereafter.
  • Single mass-based threshold must not exceed 1% of emissions embedded in imported goods and processed products.
  • EU-Britain summit in July to advance linking of respective ETSs.

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