Parliament backs 'carbon monitoring' of heavy industry imports into EU

European lawmakers have given the green light to tougher enforcement measures on imported goods traded under the EU27's carbon border tax during the European Parliament's environment committee vote on Wednesday.

The carbon border tax on products such as steel, aluminium, cement, and fertilisers will kick off its operational phase in January 2026, at which point companies will start paying for emissions generated by their products.

With the European Commission slated to announce new measures to increase monitoring of companies importing into the European Union, lawmakers voted 68-7 to speed up the legislative process.

Under the Carbon Border Adjustment Mechanism (CBAM), the measure is intended to ensure a level playing field for European companies, which are obliged to comply with the bloc's own carbon market, the Emissions Trading System.

At the same time, the EU hopes to encourage other countries to keep track of their pollution and put a price on it. Nonetheless, the United States government has complained about the EU27's carbon border tax, saying the law amounts to an unfair trade barrier.

Tough on carbon

The EU executive will announce on December 10 new measures to set a standardized CO2 value by country or company to prevent importers from sidestepping the EU carbon border tax.

According to a leaked document seen by Euronews, the Commission is set to mandate physical site visits at each installation producing goods subject to CBAM taxation in 2026.

From 2027, verifiers may replace it with a virtual visit or waive it entirely if the installation is low-risk, unchanged, and data integrity is proven.

Companies reporting their emissions based on the goods they produce will be allowed a 5% margin of error, the minimum accepted before data is deemed unreliable.

The document also suggests aligning the EU's carbon border tax with the bloc's domestic carbon market, the Emissions Trading System.

CBAM's simplification

In February, the Commission proposed "simplifying" the CBAM law that was adopted in April 2023.

EU co-legislators were quick to agree in September on an exemption threshold for companies producing less than 50 tonnes of CBAM goods annually. Before the simplification, the rule was a value-based threshold of €150 per consignment rather than a tonnage threshold.

The Commission said the change is expected to exempt approximately 182,000 importers, mostly SMEs and individuals, while still covering over 99% of emissions.

For importers that remain in the CBAM scope, the adjustments will facilitate compliance with reporting requirements, simplify the authorisation process, the calculation of emissions, and the fulfilment of financial liability.

The Commission said the changes will reduce the regulatory and administrative burdens and compliance costs.

In addition, as of 2027, the Commission may determine and make available, in the CBAM registry, the default carbon prices for third countries where carbon pricing rules are in place and publish the methodology for their calculation.

MEP Mohammed Chahim (S&D/the Netherlands) said an ambitious and efficient carbon border tax could be aligned with climate mitigation policies.

The Dutchman said the new system will replace free allowances for sectors that shift production to countries with less stringent climate policies to avoid higher costs from stricter regulations.

The automotive sector

The Brussels-based group lobbying for the automotive sector, the European Automobile Manufacturers’ Association (ACEA), recently urged the EU executive to hurry up and provide clarifications on the EU's carbon border tax, complaining that the uncertainty was affecting its members.

"Our members import and process large volumes of steel and aluminium and their role in the proper functioning of the mechanism is crucial, given the need for operators to be able to properly and accurately report the embedded emissions of their imports," the group said in a statement.

Sigrid de Vries, ACEA director general, maintained automakers' commitment to make CBAM work, noting their investment in resources and compliance operations.

“However, there are far too many critical unknowns at this very late stage, which are going to make proper implementation by 1 January 2026 practically impossible,” said de Vries.