The European Parliament approved on April 18 as many as three pieces of legislation from its landmark Fit for 55 package, which aims to reduce greenhouse gas emissions by 55% by 2030.
Among those are the Carbon Border Adjustment Mechanism (CBAM), which is designed to create a more level playing field between EU and non-EU producers by attributing a carbon price to certain imported products.
According to the lead MEP on the file, Mohammed Chahim, the CBAM will have a major impact.
"It is an absolute game changer and it's really historic because for the first time we will start asking producers to pay for also the imported CO2 emissions," he told Euronews.
"We hope that this will incentivise other regions in the world to join us in the EU to show the same ambition and decarbonise the economy as soon as possible and to keep the one so that we keep the 1.5 degrees within reach."
The CBAM, coming into force on Oct. 1, will cover several industries such as steel, cement, aluminum and fertilisers and with an initial transition period.
Adolfo Aiello, the Deputy Director-General and Director of Climate and Energy at Eurofer, the European steel industry association, called for more clarification to ensure fair competition with companies outside the EU.
"Our sector in the next eight years is expected to invest around 30 billion euros to decarbonise, but at the same time, it needs to remain competitive," Aiello said.
"So, for instance, we have 45 billion euros of European steel that is exported to third countries, and these exports, with the current measures, would be fully exposed to unilateral cost and would be made uncompetitive.
"So, in short term, our survival is at stake and our transition to green steel is also at stake."
As part of the same package, the Parliament also voted on plans to launch a new EU carbon market covering emissions from fuels used in cars and buildings in 2027, plus an EU fund of 86.7 billion euros to support households affected by the costs.
The plan is expected to add 10 euro cents to the price of petrol and diesel, which sparked fears of social unrest like the 2018 yellow vests movement in France.
Those fears were dismissed by the Commission, which pointed to the new social climate fund to soften the bill on households.
“Those who can pay for heat pumps and solar panels will have a stronger incentive to do so. For those who can’t do this on their own, support will be available,” said Frans Timmermans, the EU’s climate chief.
Belgian MEP Sara Matthieu said that while the Social Climate Fund will be vital in the near future, it is not enough.
"While this is an important achievement, it does not suffice as a social pillar for the Green Deal," she said.
"Nearly 21.9% of the total EU population is at risk of poverty, meaning that nearly 100 million people require fundamental investments in home insulation and good public transport, and they cannot be left to shoulder this burden alone. At the negotiation table, member states slashed their contributions to the Social Climate Fund and thereby greatly reduced the pot’s size.”
"The majority of the ETS revenue will go directly to member state governments, and it is up to them to utilise it for essential social spending. At EU-level, the Social Climate Fund must act as a stepping stone towards a much more ambitious and social Green Deal," she added.
