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AGRI Opinion on ENVI Report on a Carbon Border Adjustment Mechanism (CBAM)
2021/0214(COD)
AGRI/9/07544
DRAFT COMPROMISE AMENDMENTS
1. ARTICLES:
CA1 : Article 1, Paragraph 1
If adopted: 95 (LEFT), 96 (RE) fall
This Regulation establishes a carbon border adjustment mechanism (the ‘CBAM’) for
addressing greenhouse gas emissions embedded in the goods referred to in Annex I, upon their
importation into the customs territory of the Union, in order to
contribute to the gradual
reduction of imported emissions, reduce the Union’s total carbon footprint, prevent the risk
of
possible carbon leakage
and encourage carbon pricing worldwide.
CA2 : Article 30, Paragraph 1
If adopted: Rapp 9, 147 (LEFT), 148 (EPP), 150 (ID), 151 (NA), 152 (EPP) fall
The Commission shall collect the information necessary with a view to
monitoring the impact
of the CBAM on climate and environmental protection, on the competitiveness of the Union
economy, especially in the agricultural and food sectors and with regard to SMEs, on the
viability of production facilities in the sectors covered by the Regulation, on the structure and
volume of Union imports, on the costs to final customers and on developing countries.
Based on the outcome of this scrutiny, the Commission shall examine the feasibility and
relevance of extending the scope of this Regulation to indirect emissions and goods other than
those listed in Annex I,
including assessing the impact of the potential inclusion of
agricultural and agri-food products. The Commission shall also develop methods of
calculating embedded emissions based on environmental footprint methods
and ensure an
efficient and transparent verification and control system to guarantee the accuracy of the
information received from third-country producers.
CA3 : Article 30, Paragraph 2
If adopted: 149 (RE), 153 (RE), 154 (NA), 155 (LEFT), 156 (ID), 157 (EPP), 158 (SD), 159
(EPP), 160 (GREENS), 161 (RE) fall
Before the end of the transitional period, the Commission shall present a report to the European
Parliament and the Council on the application of this Regulation. The report shall contain, in
particular,
an:
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(a) assessment of the possibilities to further extend the scope of embedded emissions to indirect
emissions and to other goods at risk of carbon leakage than those already covered by this
Regulation
;
(b) assessment of the governance system
;
(c) assessment of the possibility to further extend the scope to embedded emissions of
transportation services as well as to goods further down the value chain and services that may
be subject to the risk of carbon leakage in the future
;
(d) assessment of the real impact on climate and environmental protection;
(e) assessment of the impact on the competitiveness and viability of the Union’s economy;
(f) assessment of the impact on Union’s imports;
(g) identification of the effects on sustainable innovation and changes in trade flows, supply
chains and prices with regards to fertilisers and agricultural sector;
(h) identification of the effects on Union enterprises, including a quantitative assessment of
impacts, specifically on small and medium sized enterprises (SMEs), and actual compliance
cost;
(i) assessment of the effects from the potential extension of the scope of this Regulation to
agricultural and food products and its potential implications;
(j) assessment of whether the carbon embedded in the short-lived harvested wood products,
accounted for in the land use, land use change and forestry sector, should be covered by this
Regulation;
(k) evaluation of the possibility of earmarking revenues from CBAM to promote measures
contributing to reducing EU carbon emissions and to reduce the agriculture's dependence
on fertilisers.
2. RECITALS:
CA4 : Recital 1
If adopted: 1 (RE), 2 (LEFT), 3 (EPP) fall
The Commission has, in its communication on the European Green Deal, set out a new
sustainable growth strategy that aims to transform the Union into a fair, prosperous
and
resilient society, with a modern, resource-efficient
, circular and competitive economy, where
there are no net emissions (emissions after deduction of removals) of greenhouse gases (‘GHG
emissions’) in 2050 and where economic growth is decoupled from resource use. The European
Green Deal also aims to protect, conserve and enhance the EU’s natural capital,
combat the
decline of biodiversity and protect the health and well-being of citizens from environment-
related risks and impacts. At the same time, that transformation must be
balanced, just and
inclusive,
creating sustainable growth and jobs and leaving no one behind
. In addition, the
European Green Deal aims to support the global efforts towards the achievement of the
Sustainable Development Goals of the United Nations 2030 Agenda for Sustainable
Development (UN SDGs) and the Paris Agreement. The Commission also announced in its
EU Action Plan: Towards Zero Pollution for Air, Water and Soil the promotion of relevant
instruments and incentives to better implement the polluter pays principle as set out in Article
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191(2) of the Treaty on the Functioning of the European Union (‘TFEU’) and thus complete
the phasing out of ‘pollution for free’ with a view to maximising synergies between
decarbonisation and the zero pollution ambition.
CA5 : Recital 8
If adopted: 12 (EPP), 13 (EPP) fall
As long as a significant number of the Union’s international partners have
very different policy
approaches that do not result in the same level of climate ambition
than that of the EU and
lead to significant differences in the price of GHG emissions, there is a risk of carbon leakage.
This risk exists not only for industrial goods, but also potentially for agricultural products.
Carbon leakage occurs if, for reasons of costs related to
different levels of ambition in climate
policy, businesses in certain industry
or trade sectors or subsectors were to transfer production
to other countries or imports from those countries would replace equivalent but less GHG
emissions intensive products. That could lead to an increase in their total emissions globally
while undermining the effectiveness of EU emission reduction policies, thus jeopardising the
reduction of GHG emissions that is urgently needed if the world is to keep the global average
temperature to well below 2 °C above pre-industrial levels.
CA6: Recital 12
If adopted: 29 (RE), 30 (RE), 31 (LEFT), 97 (EPP) fall
While the objective of the CBAM is to prevent the risk of carbon leakage, this Regulation
would also encourage the use of more GHG emissions-efficient technologies
and regenerative
practices , e.g. in agriculture, by producers from third countries, so that less emissions per unit
of output are generated
; it would also encourage carbon pricing worldwide, thus enhancing
a global level playing field.
At the same time, the CBAM should be seen as a way of supporting industry through
innovation and investment funding, contributing effectively to a just transition to a carbon-
neutral economy and creating new job opportunities and economic growth, while
maintaining the necessary safeguards to protect industrial competitiveness in Europe.
CA7: Recital 12a (new)
If adopted: Rapp 3, 32 (EPP), 33 (ID), 34 (EPP), 38 (SD) fall
However, the problem of carbon leakage has to be seen in a broader context of the
cumulative impact of the Union's growing environmental ambitions, as expressed, inter
alia, in the Green Deal component strategies, on the competitiveness of the Union
economy as a whole. The disparity in production standards and requirements between
the Union and its external trading partners is evident not only in the sectors covered by
the EU ETS scheme, but also, inter alia, in agriculture. Therefore, a two-pronged
approach is needed: the combat against carbon leakage through CBAM should be
accompanied by favourable investment and production conditions in the Union,
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involving, for example, the more effective use of agricultural organic matter such as
livestock manure to replace chemical fertilisers; financial incentives for innovation, for
production of bio-fertilizers and soil improvers from agricultural biomass and digestates
from biogas; the removal of administrative barriers and the reduction of adjustment
costs, especially for small and medium-sized enterprises and the agricultural sector to
ensure that their competitiveness is preserved. New resources for this purpose should be
made available.
CA8: Recital 13
If adopted: 35 (GREENS), 36 (RE), 37 (LEFT) fall
As an instrument to prevent carbon leakage and reduce GHG emissions
, the CBAM should
ensure that imported products are subject to a regulatory system that applies carbon costs
equivalent to the ones that otherwise would have been borne under the EU ETS. The CBAM
is a climate
and environmental protection measure, which should prevent the risk of carbon
leakage
, promote carbon pricing globally, enhance decarbonisation in a cost-effective and
technology-neutral way and support the Union’s increased ambition on climate mitigation,
while ensuring WTO compatibility.
Support measures for farmers in adapting to changes in
fertiliser price or sourcing should be made available under existing appropriate instruments,
notably the CAP and the NextGenerationEU, rather than compromising the efficacy and
WTO compatibility of the CBAM itself.
CA9: Recital 28
If adopted: 51 (RE), 52 (LEFT), 53 (NA) fall
Whilst the ultimate objective of the CBAM is a broad product coverage, it would be prudent to
start with a selected number of sectors with relatively homogeneous products where there is a
potential risk of carbon leakage. Union sectors deemed at risk of carbon leakage are listed in
Commission Delegated Decision (EU) 2019/708.
Any further extension of the sectors and
products covered by the CBAM should take place after an exhaustive scientific analysis and
risk assessment, based on the latest available scientific evidence. The potential contribution
of such extension, and possible negative effects as well as the effects on the stability of the
internal market should also be taken into consideration.
CA10: Recital 52
If adopted: Rapp 6, 78 (RE), 79 (LEFT), 80 (EPP), 81 (ID), 83 (RE), 85 (RE) fall
The Commission should evaluate the application of this Regulation before the end of the
transitional period and report to the European Parliament and the Council. The report of the
Commission should
, in particular
, assess as accurately as possible the real impact that the
CBAM mechanism has on climate and environmental protection, the impact on the
competitiveness and viability of the Union’s economy, especially in the agricultural sector
and on SMEs, as well as actual compliance costs. The report should also examine the effects
on sustainable innovation and changes in trade flows and supply chains, notably concerning
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fertilisers, and the effects on the prices of fertilisers and agricultural production.
It should
also assess the possibility of dedicating revenues obtained through CBAM to the financing
of measures aimed at reducing carbon emissions and promoting more sustainable use of
fertilisers in the European Union. The effects of the potential extension of the scope
of this
Regulation to agriculture and agri-food products, and other products at risk of carbon
leakage, as well as to indirect emissions, should also be evaluated. The Commission should
also develop methods of calculating embedded emissions based on the environmental footprint
methods.
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