Sittings · Document

Adopted text 2026-09-15

Establishing the Temporary Decarbonisation Fund

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✦ In short · AI summary of this text, generated 18 Sept 2026

Parliament's amended version of the proposed regulation establishing the Temporary Decarbonisation Fund provides temporary financial support in 2027-2029 to operators and downstream operators in carbon-intensive sectors facing a remaining risk of carbon leakage on exports. The Fund is financed from 25% of revenues from the sale of CBAM certificates, with Member States contributing annual amounts and transferring them by set deadlines. Support is conditional on decarbonisation requirements, including energy audits, climate neutrality plans, labour law compliance and limits on dividend payouts and share buybacks. The Commission calculates and allocates support, publishes beneficiary lists, and must report on the Fund's performance, with an interim report due by 31 March 2028. Unused revenues may be used for the Union's international climate finance commitments under Article 9 of the Paris Agreement.

Key points

  1. The Fund provides financial support in 2027-2029 to address the remaining risk of carbon leakage for carbon-intensive goods produced and exported by eligible operators and downstream operators in 2026-2027.
  2. The Fund is financed from the 25% of revenues from the sale of CBAM certificates remaining after 75% accrues to the EU budget, as external assigned revenue.
  3. Member States communicate annual contribution amounts by 31 July 2027 for 2026 and by 31 July 2028 for 2027, transferring them by 30 September 2027 and 30 September 2028 respectively.
  4. Unused revenues may be used for the Union's international climate finance commitments, in particular under Article 9 of the Paris Agreement.
  5. Eligible goods include those listed in the Annex and goods subject to a heightened remaining risk of carbon leakage identified by delegated acts, including downstream goods not listed in Annex I to Regulation (EU) 2023/956.
  6. Downstream operators producing eligible goods may receive support if they demonstrate significant additional carbon-related costs and that a substantial proportion of output is exported or supplied to exporters.
  7. Operators and downstream operators are not eligible if they breach labour law or collective agreements, or if they or their parent company are established in jurisdictions on the Union list of non-cooperative jurisdictions for tax purposes.
  8. Support is conditional on demonstrating implementation of energy audit recommendations or equivalent measures, and a legal commitment for investments to achieve climate neutrality plan targets and milestones.
  9. Beneficiaries must commit to source half of their equipment, supplies and materials from the Union's territory and must not use support for dividend payouts, share buybacks or executive bonuses over 2026-2027.
  10. Operators and downstream operators may submit a single application by 31 March 2028 covering 2026-2027, or an application by 31 March 2027 for 2026 and a supplementary application by 31 March 2028 for 2027.
  11. The Commission calculates support based on free allocation phased out, export share and EU ETS allowance prices, and for downstream operators on export volume, CO2 content of CBAM-covered inputs and CBAM certificate prices.
  12. The Commission must submit an interim report by 31 March 2028 on the Fund's performance, and may propose by 31 December 2028 to extend the Fund, adapt its scope or introduce an EU ETS secondary market transaction fee.

Who is affected

  • Operators of EU ETS installations producing carbon-intensive goods for export can receive support if they meet decarbonisation and labour conditions.
  • Downstream operators using CBAM-covered goods as inputs can receive support with less onerous commitments than operators.
  • Small and medium-sized enterprises are exempt from updating existing climate plans or audits solely to receive support.
  • Member States collect and transfer CBAM revenues to the Fund and disburse support to final beneficiaries.
  • Cement producers, including in island and peripheral Member States, are covered by the Fund for clinkers and cement products.

Figures and deadlines

  • 75% of revenue from the sale of CBAM certificates should accrue to the EU budget as an own resource.
  • The Fund is financed from the remaining 25% of revenues from the sale of CBAM certificates.
  • Support covers the years 2027, 2028 and 2029.
  • The production reference period is 2026-2027.
  • Retroactive eligibility is limited to actions undertaken from 1 January 2026 onwards.
  • Member States communicate contribution amounts by 31 July 2027 and 31 July 2028, and transfer by 30 September 2027 and 30 September 2028.
  • The Commission shall submit an interim report by 31 March 2028.
  • The Commission may submit a legislative proposal at the latest by 31 December 2028.

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