Activities of Klemen GROŠELJ related to 2021/0214(COD)
Shadow opinions (1)
OPINION on the proposal for a regulation of the European Parliament and of the Council establishing a carbon border adjustment mechanism
Amendments (50)
Amendment 82 #
Proposal for a regulation
Recital 8
Recital 8
(8) As long as a significant number of the Union’s international partners have policy approaches that do not result in the same level of climate ambition, there is a risk of carbon leakage. Carbon leakage occurs if, for reasons of costs related to climate policies, businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less GHG emissions intensive products. TIn addition to undermining the competitiveness of the European economy, that could lead to an increase in their total emissions globally, thus jeopardising the reduction of GHG emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °C above pre- industrial levels.
Amendment 95 #
Proposal for a regulation
Recital 9
Recital 9
(9) The initiative for a carbon border adjustment mechanism (‘CBAM’) is a part of the ‘Fit for 55 Package’. That mechanism is to serve as an essential element of the EU toolbox to meet the objective of a climate-neutral Union by 2050 in line with the Paris Agreement by addressing risks of carbon leakage resulting from the increased Union climate ambition., whilst preserving and promoting the development of European industries and ensuring an equal level playing field with regard to their competitiveness on EU and global markets;
Amendment 118 #
Proposal for a regulation
Recital 11
Recital 11
(11) The CBAM seeks to replacestrengthen carbon leakage protection in view of higher EU climate ambition by progressively replacing these existing mechanisms and thereby addressing the risk of carbon leakage in a different way, namely by ensuring equivalent carbon pricing and costs for imports and domestic products. To ensure a gradual transition from the current system of free allowances to the CBAM, the CBAM should be progressively phased in while free allowances in sectors covered by the CBAM are phased outshould be gradually phased out. The progressive phase-out of free allowances should only take place following an initial stage of data collection and analysis aimed at assessing the impact of the CBAM on the affected industries' competitiveness and in preventing carbon leakage both for imports and exports. The combined and transitional application of EU ETS allowances allocated free of charge and of the CBAM should in no case result in more favourable treatment for Union goods compared to goods imported into the customs territory of the Union.
Amendment 131 #
Proposal for a regulation
Recital 11 a (new)
Recital 11 a (new)
(11 a) The progressive phase-in of the CBAM and phase-out of free allocations should be accompanied by an annual review mechanism in order to realistically assess the feasibility of any further phase- out of free allocations should the CBAM be unable to adequately protect European industry against carbon leakage. Key indicators of this assessment include the profitability of European producers in the sectors covered by the CBAM, the evolution of EU market and domestic demand, as well as trade flows of European imports and exports in CBAM sectors;
Amendment 135 #
Proposal for a regulation
Recital 12
Recital 12
(12) While the objective of the CBAM is to prevent the risk of carbon leakage, this Regulation would also encourage the use of more GHG emissions-efficient technologies by producers from third countries, so that less emissions per unit of output are generated. The Commission should regularly assess and monitor whether the CBAM encourages the use of more GHG emission-efficient technologies in third countries, in coordination with the affected industrial sectors and broader stakeholders, and provide additional measures where necessary.
Amendment 148 #
Proposal for a regulation
Recital 13
Recital 13
(13) As an instrument to prevent carbon leakage and reduce GHG emissions the CBAM should ensure that imported products are subject to a regulatory system that applies carbon costs equivalent to the ones that otherwise would have been borne under the EU ETS, resulting in an equalisation of carbon costs between imported and domestic products. The CBAM is a climate measure which should prevent the risk of carbon leakage and support the Union’s increased ambition on climate mitigation, while ensuring WTO compatibility.
Amendment 171 #
Proposal for a regulation
Recital 19
Recital 19
(19) However, while the EU ETS sets an absolute cap on the GHG emissions from the activities under its scope and allows tradability of allowances (so called ‘cap and trade system’), the CBAM should not establish quantitative limits to import, so as to ensure that trade flows are not restricted. Moreover, while the EU ETS applies to installations based in the Union, the CBAM should be applied to certain goods imported into the customs territory of the Union. and should either not be applied to exported goods or should incorporate WTO-compatible solutions such as export adjustments mechanisms to avoid carbon leakage on European exports. Such mechanisms for exports shall only apply to the most GHG emission-efficient products in order to avoid carbon transfer abroad.
Amendment 176 #
Proposal for a regulation
Recital 20
Recital 20
(20) The CBAM system has some specific features compared with the EU ETS, including on the calculation of the price of CBAM certificates, on the possibilities to trade certificates and on their validity over time. These are due to the need to preserve the effectiveness of the CBAM as a measure preventing carbon leakage over time and to ensure that the management of the system is not excessively burdensome, in particular for SMEs, in terms of obligations imposed on the operators and of resources for the administration, while at the same time preserving an equivalent level of flexibility available to operators under the EU ETS.
Amendment 185 #
Proposal for a regulation
Recital 23 a (new)
Recital 23 a (new)
(23 a) Given the unique nature of the CBAM and the need for close EU coordination, a centralized CBAM authority at EU level should be established to properly implement and monitor the import and export provisions of the CBAM, and to avoid unnecessary administrative burdens on competent national authorities.
Amendment 187 #
Proposal for a regulation
Recital 23 b (new)
Recital 23 b (new)
(23 b) All circumvention practices must be prohibited, including resource shuffling, cost absorption, manipulation of emissions data, wrongful labelling of goods and slight modifications of the product so as to import a product under a different customs code, thereby avoiding the obligations set out in this Regulation.
Amendment 188 #
Proposal for a regulation
Recital 24
Recital 24
(24) In terms of sanctions, Member States should apply penalties to infringements of this Regulation and competent national authorities should ensure that they are implemented. The amount of those penalties should be identical to penalties currently applied within the Union in case of infringement of EU ETS according to Article 16(3) and (4) of Directive 2003/87/EC. However, in case of circumvention practices or in case or repeated infringements of the provisions of this Regulation, stronger penalties should apply to avoid undermining the effectiveness of the CBAM regime.
Amendment 195 #
Proposal for a regulation
Recital 29
Recital 29
(29) The goods under this Regulation should be selected after a careful analysis of their relevance in terms of cumulated GHG emissions and risk of carbon leakage in the corresponding EU ETS sectors while limiting complexity and administrative burden. In particular, the actual selection should take into account basic materials and basic products covered by the EU ETS with the objective of ensuring that imports of energy intensive products into the Union are on equal footing with EU products in terms of EU ETS carbon pricing, and to mitigate risks of carbon leakage. Other relevant criteria to narrow the selection should be: firstly, relevance of sectors in terms of emissions, namely whether the sector is one of the largest aggregate emitters of GHG emissions; secondly, sector’s exposure to significant risk of carbon leakage, as defined pursuant to Directive 2003/87/EC; thirdly, the need to balance broad coverage in terms of GHG emissions while limiting complexity and administrative effort. Specific attention should also be paid to the risk of market distortions between the different sectors covered by the CBAM, as well as between sectors covered by CBAM and those not covered by the mechanism, in terms of product substitution due to the lower price competitiveness of products subject to the CBAM regulation.
Amendment 201 #
Proposal for a regulation
Recital 30
Recital 30
(30) The use of the first criterion allows listing the following industrial sector in terms of cumulated emissions: iron and steel, refineries, cement, organic basic chemicals, and fertilisers, plastics and hydrogen. Before widening the scope of the CBAM to new sectors, including downstream products using goods covered by the CBAM, a prior assessment should be carried out by the Commission in consultation with the affected industries and stakeholders in order to verify its practicability and effectiveness. Any further extension of the scope to additional industrial sectors should be based on a predictable, clear and binding timetable.
Amendment 207 #
Proposal for a regulation
Recital 32
Recital 32
(32) In particular, organic chemicals are not included in the scope of this Regulation due to technical limitations that do not allow to clearly define the embedded emissions of imported goods. For these goods the applicable and clearly defined benchmark under the EU ETS is a basic parameter, which does not allow for an unambiguous allocation of emissions embedded in individual imported goods. A more targeted allocation to organic chemicals will require more data and analysis., which should be carried out before the phase-in of the CBAM or during the transition period;
Amendment 215 #
Proposal for a regulation
Recital 34
Recital 34
(34) However, aluminium products should be included in the CBAM as they are highly exposed to carbon leakage. Moreover, in several industrial applications they are in direct competition with steel products because of characteristics closely resembling those of steel products. Inclusion of aluminium is also relevant as the scope of the CBAM, after thorough data collection and analysis of its impact on the industries concerned, may be extended to cover also indirect emissions in the future.
Amendment 224 #
Proposal for a regulation
Recital 40
Recital 40
(40) An authorised declarant should be allowed to claim a reduction in the number of CBAM certificates to be surrendered corresponding to the carbon price already paid for those emissions in other jurisdictions., upon proving that no circumvention methods were used in the production of the declared goods;
Amendment 228 #
Proposal for a regulation
Recital 42 a (new)
Recital 42 a (new)
(42 a) If a registered producer declares false GHG emissions or is involved in any practice of circumvention of CBAM rules, it shall be deleted from the central database of authorised declarants and be subject to penalties. Where deemed appropriate, the penalty shall also entail the withdrawal of import authorization in the EU market until true and verifiable emissions are declared;
Amendment 245 #
Proposal for a regulation
Recital 49
Recital 49
(49) Once third countries will be closely integrated into the Union electricity market via market coupling, technical solutions should be found to ensure the application of the CBAM to electricity exported from such countries into the customs territory of the Union. If technical solutions cannot be found, third countries that are market coupled should benefit from a time limited exemption from the CBAM until at the latest 2030 with regard solely to the export of electricity, provided that certain conditions are satisfied. However, those third countries should develop a roadmap and commit to implement a carbon pricing mechanism providing for an equivalent price as the EU ETS, and should commit to achieving carbon neutrality by 2050 [as well as?] to align with Union legislation in the areas of environment, climate, competition and energy. That exemption should be withdrawn at any time if there are reasons to believe that the country in question does not fulfil its commitments or it has not adopted by 2030 an ETS equivalent to the EU ETS or it is importing electricity from high-emission third parties to circumvent the CBAM regulation.
Amendment 248 #
Proposal for a regulation
Recital 50
Recital 50
(50) A transitional period should apply during the period 2023 until 2025 and shall be used for data collection and analysis of the impact of CBAM on the industries concerned, with particular focus of the potential impact of the phase- out of free allocations . A CBAM without financial adjustment should apply, with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disruptive impacts on trade. Declarants should have to report on a quarterly basis the actual embedded emissions in goods imported during the transitional period, detailing direct and indirect emissions as well as any carbon price paid abroad.
Amendment 255 #
Proposal for a regulation
Recital 50 a (new)
Recital 50 a (new)
(50 a) The transitional period should serve to evaluate the overall efficiency of the CBAM in preventing carbon leakage and achieving emission reduction targets, as well as to evaluate its WTO compatibility and its effectiveness in encouraging external trade partners to adopt more ambitious climate policies.
Amendment 267 #
Proposal for a regulation
Recital 52
Recital 52
(52) The Commission should evaluate the application of this Regulation before the end of the transitional period and report to the European Parliament and the Council. The report of the Commission should in particular focus on assessing the risk of EU exports on global markets being replaced by more carbon intensive goods or by goods that are not subject to equivalent carbon costs. The Commission report shall be accompanied by a legislative proposal to develop WTO- compatible solutions such as export adjustments mechanisms to avoid carbon leakage on European exports, while preserving emission reduction targets. The report should also include possibilities to enhance climate actions towards the objective of a climate neutral Union by 2050. The Commission should, as part of that evaluation, initiate collection of information and evidence-based impact assessments necessary to possibly extend the scope to indirect emissions, as well as to other goods and services at risk of carbon leakage, and to develop methods of calculating embedded emissions based on the environmental footprint methods47 . __________________ 47Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
Amendment 276 #
Proposal for a regulation
Recital 52 a (new)
Recital 52 a (new)
(52 a) If after the transitional period, the evidence collected by the Commission indicates that the potential costs of the CBAM outweigh its benefits and the CBAM cannot effectively protect European industries falling with its scope against carbon leakage, a further phase- in of the CBAM and phase-out of free allowances should be paused until an effective solution is found.
Amendment 291 #
Proposal for a regulation
Recital 55 a (new)
Recital 55 a (new)
(55 a) The Commission shall regularly inform the European Parliament on its progress in dialogue with third countries and on any possible negative impacts of the CBAM on the industries affected by this Regulation.
Amendment 296 #
Proposal for a regulation
Recital 61 a (new)
Recital 61 a (new)
(61 a) It is crucial that a level playing field in internationally operating sectors such as aviation and the maritime industry is ensured. For aviation, this concerns routes with a high share of connecting passengers to destinations outside the EEA. For the maritime sector, ship hulls and other shipbuilding equipment built outside the Union are sensitive to a potential competitive disadvantage. Both sector’s specificities will need to be considered. Therefore, the Commission should explore mechanisms to mitigate potential competitive distortion between feeder flights from EU and non- EU hubs as well as between EU and third country shipbuilding players.
Amendment 300 #
Proposal for a regulation
Article 1 – paragraph 1
Article 1 – paragraph 1
1. This Regulation establishes a carbon border adjustment mechanism (the ‘CBAM’) for addressing greenhouse gas emissions embedded in the goods referred to in Annex I, upon their importation into the customs territory of the Union, in order to prevent the risk of carbon leakage and encourage external trade partners to pursue more ambitious climate goals on a global scale and not only in bilateral trade with the EU.
Amendment 309 #
Proposal for a regulation
Article 1 – paragraph 3
Article 1 – paragraph 3
3. The mechanism willshall, after a thorough analysis and simulation of its impact on carbon intensive industries and on their entire supply chains, progressively become an alternative to the mechanisms established under Directive 2003/87/EC to prevent the risk of carbon leakage, notably the allocation of allowances free of charge in accordance with Article 10a of that Directive. The gradual replacement shall be accompanied by a close monitoring of the effects on the competitiveness of the affected European industries, on the resulting carbon leakage and on emission reduction.
Amendment 323 #
Proposal for a regulation
Article 2 – paragraph 1
Article 2 – paragraph 1
1. This Regulation applies to goods as listed in Annex I,the extended Annex I including other carbon intensive industries such as hydrogen and plastics originating in a third country, when those goods, or processed products from those goods as resulting from the inward processing procedure referred to in Article 256 of Regulation (EU) No 952/2013 of the European Parliament and of the Council53 , are imported into the customs territory of the Union. __________________ 53Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1).
Amendment 328 #
Proposal for a regulation
Article 2 – paragraph 5 – point b a (new)
Article 2 – paragraph 5 – point b a (new)
(b a) c) the regulatory obligation and the net regulatory burden imposed in the country where the goods are originating in are equivalent to those imposed under the EU ETS.
Amendment 336 #
Proposal for a regulation
Article 2 – paragraph 7 – point c
Article 2 – paragraph 7 – point c
(c) the third country or territory has submitted a public and verifiable roadmap to the Commission, containing a timetable for the adoption of measures to implement the conditions set out in points (d) and (e);
Amendment 337 #
Proposal for a regulation
Article 2 – paragraph 7 – point d
Article 2 – paragraph 7 – point d
(d) the third country or territory has committed to climate neutrality by 2050 and has accordingly formally formulated and communicated, where applicable, to the United Nations Framework Convention on Climate Change a mid-century, long- term low greenhouse gas emissions development strategy aligned with that objective, and has credibly and effectively implemented that obligation in its domestic legislation;
Amendment 341 #
Proposal for a regulation
Article 2 – paragraph 9 – point a
Article 2 – paragraph 9 – point a
(a) if the Commission has reasons to consider that the country or territory has not shownproved sufficient progress to comply with one of the requirements listed in paragraph 7, points (a) to (f), or if the country or territory has taken any kind of action incompatible with the objectives set out in the Union climate and environmental legislation;
Amendment 357 #
Proposal for a regulation
Article 2 – paragraph 12
Article 2 – paragraph 12
12. The Union, may shall make it a priority to conclude agreements with third countries with a view to take account of carbon pricing mechanisms in these countries in the application of Article 9.
Amendment 367 #
Proposal for a regulation
Article 3 – paragraph 1 – point 11
Article 3 – paragraph 1 – point 11
(11) ‘competent authority’ means the CBAM authority, established at EU level and the national authority designated by each Member State in accordance with Article 11 of this Regulation;
Amendment 408 #
Proposal for a regulation
Article 8 – paragraph 1
Article 8 – paragraph 1
1. The authorised declarant shall ensure that the total embedded emissions declared in the CBAM declaration submitted pursuant to Article 6 are verified by a verifier accredited pursuant to Article 18, based on the verification principles set out in Annex V. The competent authority is authorised to verify the accuracy of the information in the CBAM declaration.
Amendment 443 #
Proposal for a regulation
Article 11 – paragraph 1 – introductory part
Article 11 – paragraph 1 – introductory part
1. Each Member State shall designate the competent authority to carry out the obligations under this Regulation and inform the Commission thereofA central CBAM authority at EU level is established for the purpose of implementing and managing this Regulation.
Amendment 448 #
Proposal for a regulation
Article 11 – paragraph 1 a (new)
Article 11 – paragraph 1 a (new)
1a. Each Member State shall designate the national competent authority to carry out the obligations and cooperate with the EU CBAM authority under this Regulation and inform the EU CBAM authority thereof.
Amendment 480 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The information in the database referred to in paragraph 2 shall be confidentialmade available to the public, unless it is deemed as business confidential. Information equivalent to the one made publicly available for EU producers under the EU ETS central database shall be made public.
Amendment 487 #
Proposal for a regulation
Article 14 – paragraph 4
Article 14 – paragraph 4
4. The CommissionEU CBAM authority shall establish a central database at EU level accessible to the public containing the names, addresses and contact details of the operators and the location of installations in third countries in accordance with Article 10(2). An operator may choose not to have its name, address and contact details accessible to the public.
Amendment 493 #
Proposal for a regulation
Article 15 – paragraph 1
Article 15 – paragraph 1
1. The CommissionEU CBAM authority shall act as central administrator to maintain an independent transaction log recording the purchase of CBAM certificates, their holding, surrender, re-purchase and cancellation and ensure coordination of national registries.
Amendment 511 #
Proposal for a regulation
Article 17 – paragraph 1 – point b a (new)
Article 17 – paragraph 1 – point b a (new)
(b a) the declarant has not repeatedly failed to comply with CBAM obligations in accordance to Article 26 and has not been involved in practices of circumvention in accordance to Article 27;
Amendment 566 #
Proposal for a regulation
Article 20 – paragraph 2 a (new)
Article 20 – paragraph 2 a (new)
2a. Part of the revenues generated by CBAM and collected as EU own resources shall be used to support research and innovation in carbon- reducing technologies such as renewable hydrogen uptake, storage, and other types of zero carbon industrial innovation, as well as to spur decarbonisation efforts in CBAM sectors through financing to companies operating in developing and least developed countries.
Amendment 612 #
Proposal for a regulation
Article 27 – paragraph 2
Article 27 – paragraph 2
2. Practices of circumvention include situations where a change in the pattern of trade in relation to goods included in the scope of this Regulation has insufficient due cause or economic justification other than avoiding obligations as laid down in this Regulation and may consist in: a) replacing those goods with slightly modified products, which are not included in the list of goods in Annex I but belong to a sector included in the scope of this Regulation. b) replacing those goods by goods with a lower carbon content than those normally produced in the exporting country, exclusively for the purpose of exporting to the Customs union, for instance via practices of resource shuffling. c) shipping goods to an intermediary country before being exported to the EU market in order to avoid the obligations laid down in this Regulation.
Amendment 615 #
Proposal for a regulation
Article 27 – paragraph 2
Article 27 – paragraph 2
2. Practices of circumvention include in particular situations where a change in the pattern of trade in relation to goods included in the scope of this Regulation has insufficient due cause or economic justification other than avoiding obligations as laid down in this Regulation and consist in replacing those goods with slightly modified products, which are not included in the list of goods in Annex I but belong to a sector included in the scope of this Regulation.
Amendment 630 #
Proposal for a regulation
Article 27 – paragraph 5 a (new)
Article 27 – paragraph 5 a (new)
5a. Investigations shall be initiated by the Commission or at the request of a Member State or of any interested party on the basis of sufficient evidence regarding the factors set out in Paragraph 2. The Commission shall carry out investigations and impose a penalty on an authorised declarant involved in circumvention practices. Where deemed appropriate, the penalty shall also entail the withdrawal of import authorisation.
Amendment 631 #
Proposal for a regulation
Article 27 – paragraph 5 a (new)
Article 27 – paragraph 5 a (new)
5a. The Commission shall be empowered to adopt delegated acts in accordance with Article 28 to address practices of circumvention that are not based on the modification of products included in the list of goods in Annex I.
Amendment 643 #
Proposal for a regulation
Article 30 – paragraph 1
Article 30 – paragraph 1
1. The Commission shall collect the information necessary with a view to extending the scope of this Regulation to indirect emissions and goods other, transportation services such as air transport, manufacturing of transport equipment such as ship hulls and floating structures, and other goods than those listed in Annex I, and develop methods of calculating embedded emissions based on environmental footprint methods.
Amendment 653 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
2. Before the end of the transitional period, the Commission shall present a report to the European Parliament and the Council on the application of this Regulation. The report shall contain, in particular,highlight, in particular: a) whether the Regulation effectively achieves carbon cost equalisation between imported and domestic products. b) whether the CBAM effectively mitigates carbon leakage for both imports and exports. c) whether the CBAM effectively contributes to reducing carbon emissions in third countries. d) whether the CBAM operates effectively and does not lead to forms of circumvention. e) whether, based on the above, the gradual phase-out of free allocations given in relation to the production of products listed in Annex I of the Regulation shall be initiated. f) the assessment of the possibilities to further extend the scope of embedded emissions to indirect emissions and to other goods at risk of carbon leakage than those already covered by this Regulation, as well as an assessment of the governance system. It shall also containg) the assessment of the possibility to further extend the scope to embedded emissions of transportation services as well as to goods further down the value chain and services that may be subject to the risk of carbon leakage in the future.
Amendment 660 #
Proposal for a regulation
Article 30 – paragraph 2
Article 30 – paragraph 2
2. Before the end of the transitional period, the Commission shall present a report, based on the information collected under paragraph 1, to the European Parliament and the Council on the application of this Regulation. The report shall contain, in particular, the assessment of the possibilities to further extend the scope of embedded emissions to indirect emissions and to other goods at risk of carbon leakage than those already covered by this Regulation, as well as an assessment of the governance system. It shall also contain the assessment of the possibility to further extend the scope to embedded emissions of transportation services as well asf the assessment shows that other sectors need to be included in the scope of this Regulation to goods further down the value chain and transportation services that may be subject to the risk of carbon leakage in the future, the report by the Commission shall be accompanied by a legislative proposal to extend the scope to these sectors.
Amendment 670 #
Proposal for a regulation
Article 30 – paragraph 3
Article 30 – paragraph 3
3. The report by the Commission shall, if appropriate, be accompanied by a legislative proposal to address in particular the risk of carbon leakage on export markets. This proposal shall consider WTO-compatible solutions such as export adjustment mechanisms that would equalise carbon costs, taking into account the carbon pricing schemes developed by third countries. Such export mechanisms shall be emission performance-based in order to preserve an incentive for GHG emission reduction.
Amendment 675 #
Proposal for a regulation
Article 30 – paragraph 3 a (new)
Article 30 – paragraph 3 a (new)
3a. Based on the report mentioned in Paragraph 2 and pending the development and adoption of the legislative proposal mentioned in Paragraph 3, the Commission shall either activate the phasing out of free allowances in relation to the products listed in Annex I of the regulation, or propose a revision of the Regulation.