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ADVERTISEMENTThe European Parliament took a big step forward in the fight against climate change on Tuesday, after it approved as many as three pieces of legislation from its landmark Fit for 55 package, which aims to reduce greenhouse gas emissions by 55% by 2030.
Among them was the Carbon Border Adjustment Mechanism (CBAM), which is designed to create a more level playing field between EU and non-EU producers by attributing a carbon price to certain imported products.
According to the lead MEP on the file, Mohammed Chahim, the CBAM will have a major impact.
"It is an absolute game changer and it's really historic because for the first time we will start asking producers to pay for also the imported CO2 emissions," he told Euronews.
"And it's for the first time that the EU or any other region in the world applies a carbon tariff or a carbon price on producers outside of the EU, which that's in itself historic.
"We hope that this will incentivise other regions in the world to join us in the EU to show the same ambition and decarbonise the economy as soon as possible and to keep the one so that we keep the 1.5 degrees within reach."
The CBAM will apply to several industries such as steel, cement, aluminium and fertilisers and will come into force on 1 October, but with an initial transition period.
For Adolfo Aiello, the Deputy Director-General and Director of Climate and Energy at Eurofer - the European steel industry association - more clarification is needed to ensure fair competition with companies outside the EU.
"Our sector in the next eight years is expected to invest around €30 billion to decarbonise, but at the same time, it needs to remain competitive," Aiello said in an interview.
"So, for instance, we have €45 billion of European steel that is exported to third countries, and these exports, with the current measures, would be fully exposed to unilateral cost and wood made would be made uncompetitive.
"So, in short term, our survival is at stake and our transition to green steel is also at stake."
The Parliament also adopted the reform of the Emissions Trading System (ETS) and the Social Climate Fund which should ensure a fair climate transition for all EU citizens.
On the latter, Belgian MEP Sara Matthieu said that while the money will be vital in the near future, it is not enough.
"The EU has finally created a much-needed fund to directly support people in energy and mobility poverty. While this is an important achievement, it does not suffice as a social pillar for the Green Deal," she said.
"Nearly 21.9% of the total EU population is at risk of poverty, meaning that nearly 100 million people require fundamental investments in home insulation and good public transport, and they cannot be left to shoulder this burden alone. At the negotiation table, member states slashed their contributions to the Social Climate Fund and thereby greatly reduced the pot’s size.
"The majority of the ETS revenue will go directly to member state governments, and it is up to them to utilise it for essential social spending. At EU-level, the Social Climate Fund must act as a stepping stone towards a much more ambitious and social Green Deal," she added.