- The European Parliament has approved key legislative elements of its “Fit for 55” package: EU Emission Trading System (EU ETS) reform and the new EU Carbon Border Adjustment Mechanism (CBAM).
- The EU ETS will be extended in the aviation and maritime sectors; new ETS II will cover fuels for transportation and heating.
- Free allowances under the EU ETS will be phased out starting in 2026.
- A transitional period will apply for EU CBAM from 1 October 2023 to 31 December 2026, with quarterly reporting obligations only; from 2026 onward, purchasing CBAM certificates will be required.
- Businesses are advised to assess the potential impact and prepare for new CBAM reporting obligations starting later this year.
Source EY
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