Published on: February 26, 2025 / update from: February 26, 2025 - Author: Konrad Wolfenstein
A balancing act between climate protection and economy - picture: Xpert.digital
EU loosens CO2 border compensation: What are the consequences for climate goals and business?
The EU CO2 border compensation mechanism (CBAM) of the EU: a defusing with far-reaching consequences and complex backgrounds
The European Union, a pioneer in global climate protection, faces a significant course correction in one of its most ambitious instruments to combat climate change: CO2 border compensation mechanism, or CBAM for short. a draft law , the EU Commission plans to clearly defuse the CBAM, originally very far-reaching requirements. According to this, up to 91 percent of the companies previously under the CBAM will be freed from the reporting and taxpayings. This surprising turn raises numerous questions and harbors both opportunities and risks for the European economy, global trade and the ambitious EU.
The intention behind the CO2 border compensation mechanism: climate protection and fair competitive conditions
In order to understand the scope of the planned changes, it is initially essential to illuminate the original intention and functionality of the CBAM. The CO2 limit compensation mechanism was designed as a central element of the " Fit for 55 " package of the EU, a comprehensive bundle of measures that aim to reduce the greenhouse gas emissions of the EU by 2030 compared to 1990 and reach climate neutrality by 2050 .
The CBAM aims to tackle two core problems at the same time:
1. Carbon leakage (CO2 shift)
The so -called "carbon leakage" is an essential problem in the context of ambitious climate policy. This describes the shift of emission -intensive industries and production processes to countries with less strict or no climate protection requirements. Companies could be tried to shift their production in regions outside the EU to avoid costs for CO2 emissions that are incurred by emissions trading (EU ETS) within the EU. This would not only undermine the EU climate goals, but also lead to competitive disadvantages for European companies that have to adhere to stricter environmental standards.
2. Creation of fair competitive conditions
The CBAM is intended to ensure that imports from countries with lower climate protection standards do not lead to an unfair competitive advantage over European products. By raising a CO2 price that corresponds to this in the EU for imported goods, which are produced in emission-intensive sectors, are to be created. This is intended to protect European companies and at the same time set incentives for companies outside the EU to decarbonize their production processes.
The functionality of the original CBAM: a complex system of CO2 prices at the border
The CBAM is designed as a kind of CO2 inch that is charged on selected imported goods. The functionality can be simplified as follows:
Recording of "gray" emissions
The CBAM aims to grasp the so -called "gray" or "embedded" emissions that have arisen in the production of imported goods outside the EU. These emissions include all direct and indirect greenhouse gas emissions that arise from raw material extraction to production to the transport of the goods.
CBAM certificates
In the future, importers of CBAM-liable goods will have to acquire CBAM certificates, the price of which is linked to EU emissions trading (EU ETS). The price for a CBAM certificate corresponds to the current CO2 price in the EU ETS. The number of certificates to be purchased depends on the gray emissions contained in the imported goods.
Mereit and reporting obligations
In order to correctly record the gray emissions, comprehensive reporting and reporting obligations for importers are planned. This must provide detailed information about the origin of the imported goods, the production processes and the associated emissions. The EU Commission has developed guidelines and methods for calculating gray emissions, but have been criticized as complex and bureaucratically elaborately.
Palks introduction
The CBAM is introduced in phases. Since October 2023, a transition phase in which importers only have reporting obligations has applied, but do not yet have to acquire CBAM certificates. The actual liability obligation should be gripped from 2026 and gradually implemented by 2034. Initially, the CBAM affects particularly emission -intensive sectors such as iron and steel, cement, aluminum, fertilizers, electricity and hydrogen. An extension to other sectors, such as organic chemicals and polymers, is planned.
Reasons for the planned defusing: bureaucracy, SME pollution and competitiveness
The now planned defusing of the CBAM, in particular the exemption of 91 percent of companies from the tax obligations, is justified by the EU Commission with several arguments:
1. High bureaucratic burden
One of the main arguments for the simplification of the CBAM is to reduce bureaucratic stress for companies, especially for small and medium -sized companies (SMEs). The original reporting and reporting obligations were criticized by many companies as extremely complex, time-consuming and expensive. The detailed calculation of the gray emissions, the data collection along the supply chains and the necessary documentation represented a significant challenge, especially for SMEs.
2. Disproportionate administrative effort with little benefit
Critics argued that the administrative effort for many companies, especially for smaller importers with small quantities of CBAM, were in no reason to be a reasonable relationship with the actual benefit of the CBAM. In some cases, the costs for compliance, i.e. compliance with the CBAM regulations, could exceed the actual CO2 taxes, especially for companies with low import volumes.
3. Competitiveness of the EU economy
Another important factor for defusing the CBAM are concerns about the competitiveness of the EU economy. In energy -intensive industries in particular, there were fears that the CBAM could lead to additional costs for European companies and weaken their competitiveness in global competition. The simplification of the CBAM is intended to help reduce the burden on companies and to strengthen the competitiveness of the EU industry.
4. Political and economic realities
There are also political and economic realities behind the defusing of the CBAM. The EU Commission is under pressure to reduce the stress on companies and to boost the economy, especially in times of economic uncertainty and increasing energy prices. The simplification of the CBAM can be interpreted as a concession to the economy and an attempt to increase the acceptance of the Green Deal and climate policy among the population and in the economy.
The key points of the planned changes: focus on large importers and simplified calculations
The draft law to defuse the CBAM essentially provides for the following changes:
1. Exception for small importers
The most important change is the introduction of a threshold for CBAM obligation. According to this, only importers who are introduced to more than 100 tons of CBAM are subject to CBAM levies. Below this threshold, companies are to be released from the reporting and paying obligations.
2. Liberation of 91 percent of companies
According to the EU Commission, this threshold is intended to exempt around 91 percent of the companies currently affected by the CBAM from CBAM obligations. This primarily affects small and medium-sized companies that import only small amounts of CBAM-liable goods.
3. focus on large importers
Although 91 percent of companies are to be released, the EU Commission emphasizes that 99 percent of relevant emissions should continue to be recorded. This is because the remaining 9 percent of importers, i.e. the major importers, are responsible for the majority of imports and the associated emissions. The concentration on these large importers is intended to reduce the administrative effort for the vast majority of companies without significantly reducing the climate effect of the CBAM.
4. Simplification of emission calculations
In addition to the introduction of the threshold, the methods to calculate the gray emissions should also be simplified. The details of these simplifications are not yet fully known, but it is expected that the EU Commission will allow less detailed and less complex calculation methods. This could include, for example, the use of average or simplified emission factors instead of detailed calculations at the product level.
5. Adjustment of the threshold for exemptions
It can be assumed that the threshold of 100 tons is checked at regular intervals and, if necessary, adjusted to ensure that it is still appropriate and achieves the desired goals. A dynamic adjustment of the threshold could be necessary to react to changes in trade and emission patterns.
6. Salvation in information obligations
In addition to the simplified calculation methods, relief from information obligations is also expected. This could include, for example, reducing the requested information about the third country, the production processes or the supply chains. The aim is to limit the information obligations to the essentials and to minimize the bureaucratic effort for companies.
Effects and reactions: between approval and criticism
The planned changes to the CBAM have caused different reactions that reflect a wide range of opinions and interests:
Approval from the economy
In particular, circles of industry and business associations have approval to the planned simplifications. Many companies, especially SMEs, welcome the reduction in bureaucratic stress and focus on large importers. In the changes, they see a step in the right direction to strengthen the competitiveness of the EU economy and increase the acceptance of the CBAM. Peter Liese, MEP of the CDU and climate expert, expressed a positive statement about the suggestions and emphasized that the core goals of the political project were “not touched”. He sees a pragmatic approach in the simplifications to improve the practical implementation of the CBAM.
Criticism of environmental organizations and climate protectors
Environmental organizations and climate protectionists, on the other hand, express criticism of the planned defusing. They fear that the simplifications could reduce the effectiveness of the CBAM and endanger the EU climate goals. They argue that the CBAM is an important instrument to prevent carbon leakage and stimulate global climate protection measures, and that too extensive defusing could undermine these goals. Critics warn that the liberation of 91 percent of companies sends a wrong signal and could give the impression that the EU is no longer taking climate protection seriously. It is feared that the simplifications could create loopholes and that companies could try to bypass the CBAM obligations.
Reactions of third countries and trading partners
The changes to the CBAM could also cause reactions from the EU's third countries and trading partners of the EU. Some countries, especially developing countries, have already expressed concerns about the effects of the CBAM on their exports. They fear that the CBAM leads to new trade barriers and affects its economic development. The simplifications could possibly alleviate these concerns, but it can be expected that the EU must continue to be in dialogue with its trading partners in order to promote the acceptance of the CBAM and to avoid possible trade conflicts.
The CBAM as part of a larger reform package for reducing bureaucracy
The defusing of the CBAM is part of a more comprehensive reform package from the EU Commission on Bureaucratic Design. This package aims to reduce the stress on companies and to strengthen the competitiveness of the EU economy. In addition to the CBAM, other areas are also affected, such as the EU Lief Chain Act and the sustainability reporting. The EU Commission emphasizes that it is an overall package that aims to find the balance between ambitious environmental goals and economic competitiveness.
The future of the CBAM: challenges and perspectives
The CO2 border compensation mechanism is still facing numerous challenges and harbors both opportunities and risks for the future:
Effectiveness of the simplifications
One of the central questions is to what extent the planned simplifications actually lead to a reduction in bureaucratic stress without reducing the effectiveness of the CBAM. It will be crucial that the EU Commission carefully accompanies the implementation of the changes and closely observes the effects on the companies and the climate goals. Regular review and adjustment of the CBAM could be necessary to ensure that it continues to achieve his goals.
Global acceptance and imitation
The CBAM is a unique instrument worldwide. Whether it is established as a model for other countries and regions depends on various factors, including the practical implementation, acceptance by the economy and the reactions of the trading partners. A successful implementation of the CBAM in the EU could encourage other countries to introduce similar mechanisms and thus contribute to a global CO2 price. However, an excessive defusing could send the signal that the EU itself is no longer fully convinced of its own instrument and that global imitation difficult.
Expansion to other sectors and emissions
The EU Commission is already chosen to expand the CBAM to further sectors and emissions. The inclusion of organic chemicals and polymers is under discussion, and the long-term plan is to include all goods that fall under the EU emission trade. Expansion of the CBAM to other sectors and emissions would significantly increase its climate effect, but also increase complexity and bureaucratic effort. It will therefore be crucial to take into account the experience from the first phase in future extensions of the CBAM and to maintain the balance between the climate effect and practicality.
Technological development and innovation
The CBAM can also act as an incentive for technological development and innovation in low -emission production processes. Companies that invest in low-emission technologies and decarbonize their production processes can reduce their CBAM levies and create competitive advantages. The CBAM could thus make an important contribution to the transformation of industry and to achieve climate neutrality.
A balancing act between climate protection and economy
The planned defusing of the EU CO2 limit mechanism of the EU illustrates the complex challenges and the necessary balancing act between ambitious climate goals and economic competitiveness. Simplifications are an attempt to reduce the bureaucratic burden on companies and increase the acceptance of the CBAM without endangering the core targets of the climate protection instrument. Whether this balancing act will succeed will be shown in the coming years. It will be crucial to carefully accompany the implementation of the CBAM, to observe the effects closely and to adapt the mechanism to ensure its effectiveness and acceptance in the long term. The CBAM remains an important and innovative instrument in the fight against climate change, its further development and global spread of great importance for achieving global climate goals.
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