Carbon border tax: European Parliament approves simplification of rules

A massive vote of 564 votes to 20. The European Parliament supported, by a very large majority on Thursday, May 22, the simplification of the carbon tax at the EU's borders, with an exemption for small importers. Only those importing more than 50 tons per year of products deemed polluting will now be affected by the law. The measure was approved by MEPs from all sides.

In 2022, the European Union adopted this "carbon border adjustment mechanism" (CBAM) , which targets the most polluting sectors such as steel, aluminum, cement, fertilizers, electricity, and hydrogen.

In practice, the importer must declare the CO2 emissions linked to the production process, and if these exceed European standards, acquire an "emission certificate" at the price of CO2 in the EU.

Dubbed the "carbon tax," the mechanism has been in place since October 2023 for a test phase. According to the European Commission and many MEPs, this transitional period has made it possible to identify that the thresholds chosen so far—starting at €150.00 per product import—were significantly too low. The increase to 50 tonnes per year will exempt 90% of importers, mainly SMEs and individuals, whose CO2 emissions are considered marginal.

The measure is part of a policy of all-round simplification undertaken by the European Commission to support the competitiveness of businesses.

But the choice made on the carbon tax is much more consensual than other simplification measures envisaged which have aroused the ire of environmental organizations. This time, "it is an example of intelligent simplification, based on the facts," considers centrist Pascal Canfin (Renew).

"The €150 threshold doesn't work. It was too low. It involves too many transactions, with forms to fill out, for transactions that are epsilon-like in terms of CO2 emissions," he notes.

On a more sensitive point, the European Commission must decide in the coming months on the possibility of extending this carbon mechanism to other sectors such as the automobile and aeronautics industries.