Briefing - Carbon Border Adjustment Mechanism (revision) - 16-03-2026
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The impact assessment supports the proposed legislative amendments to extend the Carbon Border Adjustment Mechanism (CBAM) to downstream goods, prevent the circumvention of CBAM obligations, and encourage the decarbonisation of electricity imports. While overBriefing - Carbon Border Adjustment Mechanism (revision) - 16-03-2026
The impact assessment supports the proposed legislative amendments to extend the Carbon Border Adjustment Mechanism (CBAM) to downstream goods, prevent the circumvention of CBAM obligations, and encourage the decarbonisation of electricity imports. While overall it provides a good evidence-based analysis supporting the proposal, it could have been better structured and presented. One of the main shortcomings is that the downstream study, which provides a lot of supporting data justifying the proposal, is not publicly available. The IA defines the problems clearly, despite the challenge that, due to the nature of the basic act, these identified problems have not yet occurred. The IA openly acknowledges this limitation. Given that the three identified problems are very different, the IA analyses several policy options for each of them. Some options are analysed well; however others could have been better developed and explained. The IA presents the preferred policy combination that appears to be the best in terms of potential outcomes, i.e. reducing global emissions and carbon leakage, minimising the risk of circumvention, lessening administrative burden, and improving the treatment of electricity imports. The IA identifies the initiative's general and specific objectives, which are specific, measurable, achievable, relevant and time-bound, as recommended by the Better Regulation Toolbox 'S.M.A.R.T.' criteria. The assessment of environmental, economic and social impacts is carried out, but it is elaborated unevenly. Stakeholders were widely consulted, clearly divided per problem they were addressing, and their views were considered. It appears that efforts were made to address the Regulatory Scrutiny Board's recommendations, but some shortcomings remain, related to the CBAM anti-avoidance measures. Lastly, it appears that the proposal is in line with the preferred policy option combination as identified in the IA. Source : © European Union, 2026 - EP Read more
