CBAM EU Parliament vote postponed

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CBAM EU Parliament vote postponed

Vote postponed due to impasse on ETS in the Parliament

The vote of the EU Parliament on the adoption of the Carbon Border Adjustment Mechanism (CBAM) originally scheduled for 6-9 June 2022 has been postponed, due to the rejection of the revision of the EU Emissions Trading System (ETS).

Postponement of adoption of the Carbon Border Adjustment Mechanism (‘CBAM’)

Following our previous update of 19 May 2022, the CBAM proposal was to be put up for vote in the EU Parliament on 8 June 2022. However, the vote was postponed and the proposal was referred back to the Environment, Public Health and Food Safety (‘ENVI’) Committee for further discussion.

Background of the postponement

The postponement of the vote on the CBAM proposal follows from the rejection of the proposal to revise the ETS by the EU Parliament, with which the CBAM is closely linked. The grounds for the rejection of the revised ETS are centred around the timeline for the phasing out of free allowances under the ETS system. In the proposal these free allowances were to be phased out completely in 2032; however an amendment to delay this to 2034 was included by EU Parliament ahead of the vote, which led to the EU Parliament ultimately rejecting the adoption of the ETS proposal as a whole.

Voting on the CBAM proposal was considered inopportune after this rejection, and was subsequently referred back to the ENVI Committee for deliberation and possible amendments. The ENVI Committee is expected to put the (amended) CBAM proposal to a vote in the EU Parliament at a later date.

Impact on business

The postponement of the vote on the CBAM proposal prolongs the uncertainty around the exact scope and timeline of the CBAM. Businesses are advised to continue making preparations, as despite this the expectation is still that CBAM proposal will be adopted (albeit at a later date).

How we can help

Deloitte’s Global Trade Advisory specialists are part of a global network of professionals who provide specialised assistance in global trade matters, including on the topic of CBAM. Our professionals can support in carrying out an initial CBAM quick scan and broader supply chain reviews in the light of the CBAM implementation, transitional period and compliance requirements.

For more information about the impact the CBAM can have on your business and our capabilities in this regard, please contact one of our experts.

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