- On 13 December 2022, the European Parliament reached a provisional agreement with the Council of the European Union (EU) to implement an EU Carbon Border Adjustment Mechanism (CBAM), covering product categories of iron and steel, aluminum, fertilizers, hydrogen, and electricity, effective from 1 October 2023.
- On 18 December 2022, the European Parliament and the Council reached a provisional agreement on EU Emission Trading System (ETS) reform and phasing out of free allowances, which will start in 2026 and end by 2034. Businesses will therefore be required to purchase CBAM certificates for covered imports from 2027.
- EU ETS reform notably includes extensions of scope to maritime transport and municipal waste incineration.
- A parallel carbon market will be established to cover fossil fuels used to power cars and heat buildings.
Source EY
