MEPs move to widen CBAM and add fertilizer support

Environment Committee MEPs have backed changes to strengthen the EU’s Carbon Border Adjustment Mechanism (CBAM), voting to extend it to a long list of downstream steel and aluminium products, tighten anti circumvention rules and set up a Temporary Decarbonisation Fund (TDF) for industry. The committee adopted its CBAM position by 56 votes to 11, with 12 abstentions, and its TDF position by 59 to 16, with 6 abstentions.

In Parliament’s process, the CBAM changes are led by rapporteur Mohammed Chahim (S&D, NL), the MEP appointed to manage the file, draft the report and steer negotiations, while the TDF is handled by rapporteur Pascal Canfin (Renew, FR). Both act as the lead authors and political managers for their respective dossiers.

CBAM’s scope would be expanded beyond basic materials to finished goods such as fasteners, wire, springs and household articles, using transparent, quantitative methodologies. MEPs also propose tougher rules against “slight modification” and processing designed purely to avoid CBAM, new enforcement powers for the Commission to apply true origin default values where circumvention is detected, and specific rules to close online sales loopholes via weight based limits per seller and retroactive liability on split shipments.

On the TDF, MEPs want support to run from 2027 to 2029, earlier than the Commission’s 2028 start. Crucially for the fertilizer sector, they propose opening the fund to fertilizer producers and downstream users facing higher carbon related input costs, explicitly naming urea, ammonium nitrate and ammonium sulphate as eligible products, alongside other CBAM covered goods used as inputs. Any leftover revenue could be redirected to EU international climate finance rather than returned to member states.

Chahim said the compromise “makes the CBAM stronger, fairer and more resilient,” closing loopholes and strengthening enforcement against circumvention, while Canfin highlighted “a more robust solution for our farmers hit by fertilizer costs, and an export scheme to protect our companies on export markets where their competitors do not pay a carbon price.” Parliament is scheduled to adopt its mandate for negotiations with member states at the September plenary, before the changes are finalised.