The European Parliament has been urged to overturn a vote by its environment committee that deletes a draft provision that would allow for the suspension of the carbon border adjustment mechanism (CBAM). The plenary of the parliament is set to confirm the committee's position in September.
Given the large cross-party majority in committee on 6 July, it will be difficult for European farm industry association Copa Cogeca to convince a majority in the whole parliament to overturn the committee vote. Copa Cogeca deeply regrets the committee vote that "removes the only crisis safety valve for farmers", it said.
Parliament will later this year negotiate a final legal text for CBAM amendments with EU states that favour suspension under the new draft CBAM article 27a, albeit only if prices of a certain CBAM good are more than 50pc above the average in the previous 10 years for at least six months. A farm industry source said the conditions weaken the possibility of suspension but noted that the current crisis would have triggered CBAM suspension.
Alongside fertilizers, the CBAM covers imports of iron and steel, cement, aluminium, electricity and hydrogen. The committee vote, if adopted into law, would add methanol to products covered by the CBAM.
The environment committee's proposal, adopted under a separate legal proposal, to include cereals for export in the temporary decarbonisation fund is also "little more than a sticking plaster", Copa Cogeca added, noting benefits only for export-oriented cereals, while not offsetting the effects of the CBAM for most of the EU's internal crop market.
Parliament's legal text would oblige the commission to assess whether or not to extend the existence of the CBAM exporters' fund after 31 December 2029. The fund would be financed by 25pc of CBAM revenues that member states collect from authorised CBAM declarants from 1 February 2027.
Parliament wants to add to the list of eligible export goods nitrogen-based fertilizers and fertilizer raw materials. The list of products that would, if voted into law, fall under the CBAM includes potassium nitrate (CN 28342100), ammonium nitrate (CN 31023090), nitrogen–potassium (CN 31059020), diammonium phosphate (CN 31053000), nitrogen–phosphorus–potassium (CN 31052090), ammonium sulphate (CN 31022100) and urea (CN 31021090).
