European climate and taxation commissioner Wopke Hoekstra is "absolutely" confident that EU member states will give "full" support to an EU-wide temporary decarbonisation fund for carbon leakage in industrial sectors covered by the bloc's carbon border adjustment mechanism (CBAM).
This is despite the European Commission proposing that 25pc of CBAM revenues originally earmarked for national budgets now finance the CBAM fund.
"We're not going to make this part of the EU budget. This is money that immediately is going to be spent on the companies of member states," Hoekstra told Argus, noting that the fund is helping EU states' own industries.
Financing the fund may still be contentious, especially for EU countries. In addition to proposing that the fund be financed by revenues currently earmarked for EU states' budgets, the commission leaves untouched the remaining 75pc earmarked for the EU budget.
Hoekstra said that CBAM's increased scope, expanded to downstream products, "roughly" equates to the financing required for the fund. "We did not try to design it exactly that way. But it is convenient because it makes the conversation with member states even easier," Hoekstra said.
The European Parliament and EU member states are likely to amend the revised CBAM regulation and accompanying laws before adoption. Under the proposal, over 140 CN goods categories produced by EU-based manufacturers will receive support from the fund.
The commission does not propose any differentiation between support given to manufacturers' EU exports and locally sold goods.
The commission is proposing extending CBAM to certain steel and aluminium-intensive downstream products from the start of 2028. A further 180 CN custom duty codes will include some 7,500 new importers under the mechanism. A wide range of iron and steel products are proposed for inclusion, including stranded wire, ropes, cables, washing machines, sawing machines and even metal furniture.
