After an unpredictable legislative journey, the European Union has entered the final stage of negotiations on the world’s first carbon border adjustment mechanism (CBAM). It would appear that some in the United States Congress are paying attention.
On June 8th, the European Parliament rejected a proposal to reform the EU’s Emissions Trading System (ETS) which sets the EU’s domestic carbon price and postponed a vote on the complementary CBAM designed to stop carbon leakage. By June 22nd, however, both parts of the broader “Fit for 55” climate package passed with large majorities.
Given the Council of the EU agreed on a CBAM general approach in March, leaders from both the Parliament and Council will now negotiate a compromise text. The EU’s goal is to have a final text voted on and passed by both institutions before the end of the year in order to implement the initial reporting phase of CBAM in 2023.
Source Tax Foundation
