The European Commission is currently working on a special document to expand the scope of the Carbon Border Adjustment Mechanism (CBAM) to additional sectors and products, which it will present in the coming weeks.
This was announced by David Cruz, a CBAM specialist at the Norwegian company CEMAsys, on LinkedIn, citing Martin Becker, deputy head of the European Commission's department responsible for economic analysis of indirect taxes and CBAM, as well as taxation issues in exempt sectors.
According to Cruz, the announced special document on export leakage will be a key step in resolving one of the most controversial aspects of CBAM.
Martin Becker said that the European Commission has accelerated the process in three areas:
1. Simplification.
EU officials have acknowledged that the administrative burden has affected too many reporting entities, so we can expect an agreement on simplification.
2. Export leakage.
An official communication on the risks of export leakage in CBAM sectors will be published this month.
“This is crucial because many companies are left unclear about how exports will be treated under the current system,” says Cruz.
3. Expansion to processing and distribution sectors.
This will only happen once the system for the current sectors is stable. A roadmap will be developed later, and by the end of the year, we can expect to see proposals for more complex sectors, such as the chemical industry.
"The European Commission is currently analyzing the risks of carbon leakage for sectors not yet covered by CBAM. This work is forward-looking rather than end-of-the-road and is based on changing assumptions and the current regulatory landscape. Although uncertainty remains, they are preparing initial forward-looking recommendations that will guide the next steps at the end of the year," explained the CBAM specialist.
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