Annexes to COM(2021)564 - Carbon border adjustment mechanism - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)564 - Carbon border adjustment mechanism. |
|---|---|
| document | COM(2021)564  |
| date | May 10, 2023 |
1.5.5.Assessment of the different available financing options, including scope for redeployment
Implementation costs for CBAM will be financed by the EU budget.
1.6.Duration and financial impact of the proposal/initiative
◻ limited duration
–◻ in effect from [DD/MM]YYYY to [DD/MM]YYYY
–◻ Financial impact from YYYY to YYYY for commitment appropriations and from YYYY to YYYY for payment appropriations.
× unlimited duration
–Implementation with a start-up period from 1 January 2023
–followed by full-scale operation.
1.7.Management mode(s) planned 57
✓ Direct management by the Commission
–◻ by its departments, including by its staff in the Union delegations;
–◻ by the executive agencies.
◻ Shared management with the Member States
◻ Indirect management by entrusting budget implementation tasks to:
–◻ third countries or the bodies they have designated;
–◻ international organisations and their agencies (to be specified);
–◻ the EIB and the European Investment Fund;
–◻ bodies referred to in Articles 70 and 71 of the Financial Regulation;
–◻ public law bodies;
–◻ bodies governed by private law with a public service mission to the extent that they provide adequate financial guarantees;
–◻ bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that provide adequate financial guarantees;
–◻ persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.
–If more than one management mode is indicated, please provide details in the ‘Comments’ section.
Comments
2. MANAGEMENT MEASURES
2.1.Monitoring and reporting rules
Specify frequency and conditions.
The Commission will ensure that arrangements are in place to monitor and evaluate the functioning of the CBAM and evaluate it against the main policy objectives. Given that CBAM is one of the policy proposals under the ‘Fit for 55 Package’, monitoring and evaluation could be carried out in alignment with the other policies of the package.
The administration system should be evaluated after the first year of operation to identify any issues also in terms of governance and potential improvements. In addition, when more data is available, the Commission will also review the scope of the CBAM to examine the possibility of extending it to cover emissions of additional sectors and further down the value chain. For this, it is necessary to monitor the effect of CBAM on the shortlisted sectors.
2.2.Management and control system(s)
2.2.1.Justification of the management mode(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed
A set-up similar to the EU ETS building on national competent authorities allows a swift implementation of the CBAM. In addition, limited functions in particular as regards IT carried out at central level should ensure cooperation and collaboration in the implementation of CBAM.
2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them
The proposed CBAM will be based on a declarative system, which entails the risk of non-declaration or misdeclaration.
In order to address the risk of non-declaration, the system requires an authorisation before importing goods in the scope of the Regulation. National customs authorities will be in charge of enforcing this rule by not releasing into free circulation these goods as long as the declarant is not authorised according to this Regulation.
In order to address the risk of misdeclaration a system of auditing on risk assessment criteria as well as random audits will be in place coupled with sanctions set up as a sufficiently high level to serve as deterrent. Auditing will take place both at the level of CBAM declaration by the national authorities and at the level of import declarations by customs authorities.
2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)
The role of the national authorities will be to control the correct application of CBAM, in particular the surrender of CBAM certificates and the collection of funds. A risk management system will be applied to ensure cost-effective controls.
2.3.Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties.
An authorised declarant who fails to surrender, by 31 May of each year, a number of CBAM certificates corresponding to the emissions embedded in goods imported during the previous year or submits to the national competent authority false information related to actual emissions with a view to obtain a favourable individual treatment, shall be held liable for the payment of a penalty.
The amount of the penalty will be based on penalties in the EU ETS. Payment of the penalty shall not release the authorised declarant from the obligation to surrender the outstanding number of CBAM certificates to the national competent authority.
In case of repeated offences, the national competent authority may decide to suspend the account of the declarant.
Implementing acts will provide more detail on the application of penalties.
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected
·Existing budget lines
In order of multiannual financial framework headings and budget lines.
| Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution | |||
| Number | Diff./Non-diff. 58 | from EFTA countries 59 | from candidate countries 60 | from third countries | within the meaning of Article 21(2)(b) of the Financial Regulation | |
| 7 | 20 01 02 01 | Non-diff. | NO | NO | NO | NO |
·New budget lines requested
In order of multiannual financial framework headings and budget lines.
| Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution | |||
| Number | Diff./non-diff. | from EFTA countries | from candidate countries | from third countries | within the meaning of Article 21(2)(b) of the Financial Regulation | |
| 3 | 09.20.YY – Carbon Border Adjustment Mechanism | Diff. | NO | NO | NO | NO |
3.2.Estimated impact on expenditure
3.2.1.Summary of estimated impact on expenditure
EUR million (to three decimal places): Current Prices
| Heading of multiannual financial framework | Number | 3 Natural resources and environment |
| DG: TAXUD | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL | ||
| • Operational appropriations | |||||||||
| Budget line 61 | Commitments | (1a) | 1.3 | 2.25 | 2.45 | 1.8 | 1.65 | 1.55 | 11.1 |
| Payments | (2a) | 1.3 | 2.25 | 2.45 | 1.8 | 1.65 | 1.55 | 11.1 | |
| TOTAL appropriations for DG TAXUD | Commitments | =1a | 1.3 | 2.25 | 2.45 | 1.8 | 1.65 | 1.55 | 11.1 |
| Payments | =2a | 1.3 | 2.25 | 2.45 | 1.8 | 1.65 | 1.55 | 11.1 |
Heading of multiannual financial framework | 7 | ‘Administrative expenditure’ |
EUR million (to three decimal places): Current Prices
| 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL 2021 -2027 MFF | |||
| DG: TAXUD | ||||||||
| • Human resources | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 | ||
| • Other administrative expenditure – Missions | ||||||||
| TOTAL DG TAXUD | Appropriations | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 |
| TOTAL appropriations under HEADING 7 of the multiannual financial framework | (Total commitments = Total payments) | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 |
EUR million (to three decimal places): Current Prices
| 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL 2021 – 2027 MFF | |||
| TOTAL appropriations under HEADINGS 1 to 7 of the multiannual financial framework | Commitments | 3.114 | 2.566 | 2.416 | 2.316 | 1.712 | 12.124 | |
| Payments | 3.114 | 2.566 | 2.416 | 2.316 | 1.712 | 12.124 |
3.2.2.Summary of estimated impact on Commission’s administrative appropriations
–◻ The proposal/initiative does not require the use of appropriations of an administrative nature
–× The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:
EUR million (to three decimal places)
| Year 2021 | Year 2022 | Year 2023 | Year 2024 | Year 2025 | Year 2026 | Year 2027 | TOTAL |
| HEADING 7 of the multiannual financial framework | ||||||||
| Human resources | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 | ||
| Other administrative expenditure | ||||||||
| Subtotal HEADING 7 of the multiannual financial framework | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 |
| Outside HEADING 7 62 of the multiannual financial framework | ||||||||
| Human resources | ||||||||
| Other expenditure of an administrative nature | ||||||||
| Subtotal outside HEADING 7 of the multiannual financial framework |
| TOTAL | 1.064 | 1.216 | 1.216 | 1.216 | 0.912 | 5.624 |
The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
3.2.2.1.Estimated requirements of human resources
–◻ The proposal/initiative does not require the use of human resources.
–× The proposal/initiative requires the use of human resources, as explained below:
Estimate to be expressed in full time equivalent units
| 2023 | 2024 | 2025 | 2026 | 2027 | Total | ||
| • Establishment plan posts (officials and temporary staff) | |||||||
| 20 01 02 01 (Headquarters and Commission’s Representation Offices) | 7 | 8 | 8 | 8 | 6 | 6 | |
| 20 01 02 03 (Delegations) | |||||||
| 01 01 01 01 (Indirect research) | |||||||
| 01 01 01 11 (Direct research) | |||||||
| Other budget lines (specify) | |||||||
| • External staff (in Full Time Equivalent unit: FTE) 63 | |||||||
| 20 02 01 (AC, END, INT from the ‘global envelope’) | |||||||
| 20 02 03 (AC, AL, END, INT and JPD in the delegations) | |||||||
| XX 01 xx yy zz 64 | - at Headquarters | ||||||
| - in Delegations | |||||||
| 01 01 01 02 (AC, END, INT - Indirect research) | |||||||
| 01 01 01 12 (AC, END, INT - Direct research) | |||||||
| Other budget lines (specify) | |||||||
| TOTAL | 7 | 8 | 8 | 8 | 6 | 6 |
XX is the policy area or budget title concerned.
The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
Description of tasks to be carried out:
| Officials and temporary staff | The CBAM regulation requires the Commission to follow up with several delegated and implementing acts once the CBAM regulation is adopted. Commission staff will also be needed to review and assess the functioning of the CBAM system and to implement the IT system. |
| External staff |
3.2.3.Compatibility with the current multiannual financial framework
✓ The proposal/initiative is compatible the current multiannual financial framework.
◻ The proposal/initiative will entail reprogramming of the relevant heading in the multiannual financial framework.
◻ The proposal/initiative requires application of the flexibility instrument or revision of the multiannual financial framework 65 .
3.3.Estimated impact on revenue
◻ The proposal/initiative has no financial impact on revenue.
✓ The proposal/initiative has the following financial impact:
✓ on own resources
◻ on other revenue
◻ please indicate, if the revenue is assigned to expenditure lines
EUR million (to three decimal places)
| Budget revenue line: | Appropriations available for the current financial year | Impact of the proposal/initiative | |||||||
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | ||
| Article …………. | 0 | 0 | 0 | 1,510 | 1,660 | 1,810 | 1,960 | 2,110 |
Note: CBAM is not expected to generate revenue in the transitional period from 2023 to 2025.
During its definitive stage, namely from 2026, yearly CBAM revenues will depend on the degree of phase-out of free allocation and the respective phase-in of the border measure.
In 2030, total yearly revenues from the border measure alone are expected to amount to EUR 2.1 billion are expected to be raised by the border measure and EUR 7 billion from additional.
For miscellaneous ‘assigned’ revenue, specify the budget expenditure line(s) affected.
Specify the method for calculating the impact on revenue.
The JRC GEM-E3 model was used to estimate revenues generated by CBAM.
(1) Article 2(1)(a) of the Paris Agreement.
(2) Communication from the Commission of 11 December 2019 on The European Green Deal (COM(2019) 640 final, p. 4.
(3) The Commission put forward the proposal COM(2020) 563 final, amending the initial Commission proposal on the European climate law to include a revised EU emission reduction target of at least 55 % by 2030. On 10-11 December 2020, the European Council in its conclusions endorsed this increased EU target.
(4) Communication from the Commission of 17 September 2020 on Stepping up Europe’s 2030 climate ambition. (COM(2020) 562 final: Part 1/2).
(5) Conclusions of the European Council of 11 December 2020. (EUCO 22/20 CO EUR 17 CONCL 8).
(6) German Presidency of the Council of the EU (2020). The update of the nationally determined contribution of the European Union and its Member States.
(7) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
(8) Commission Work Programme 2021. (COM(2020) 690 final). Annex I outlines all the instruments under the package.
(9) European Parliament resolution of 10 March 2021 ‘Towards a WTO-compatible EU carbon border adjustment mechanism’.
(10) Communication from the Commission of 12 May 2021 on Pathway to a Healthy Planet for All (COM(2021) 400 final).
(11) Article 191(2) of the Treaty on the Functioning of the European Union.
(12) Commission Communication. (2019). The European Green Deal (COM(2019) 640 final), p. 4.
(13) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
(14) Article 4(3) of the Paris Agreement.
(15) [OP please insert the number of the proposed EU ETS revision when available]
(16) State of the Union Address by President von der Leyen at the European Parliament Plenary on 16 September 2020. https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_20_1655
(17) Article 191(2) of the Treaty on the Functioning of the European Union.
(18) Commission Communication. (2021). Pathway to a Healthy Planet for All. (COM(2021), 400 final).
(19) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).
(20) https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-EU-Green-Deal-carbon-border-adjustment-mechanism-_en
(21) https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-EU-Green-Deal-carbon-border-adjustment-mechanism-_en
(22) [OP please insert the link to the impact assessment after publication]
(23) [OP please insert the link to the study after its publication]
(24) [OP please insert the links to the summary sheet and the positive opinion of the RSB after their publication.]
(25) OJ C 326, 26.10.2012, p. 391.
(26) Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1).
(27) See European Council conclusions, 17-21 July 2020 .
(28) Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (OJ L 433I , 22.12.2020, p. 28).
(29) OJ C, , p. . [OP please insert the number of the opinion]
(30) OJ C, , p. . [OP please insert the number of the opinion]
(31) Communication from the Commission of 11 December 2019 on the European Green Deal (COM(2019) 640 final).
(32) Communication from the Commission of 12 May 2021 on Pathway to a Healthy Planet for All (COM(2021) 400).
(33) OJ L 282, 19.10.2016, p.4.
(34) Council of the European Union ST/14222/1/20/REV1.
(35) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).
(36) IPCC, 2018: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)].
(37) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
(38) Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, p. 26).
(39) Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU (OJ L 156, 19.6.2018, p. 1).
(40) Convention on the Law of the Sea, Montego Bay, 10 December 1982.
(41) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).
(42) Commission Delegated Decision (EU) 2019/708 of 15 February 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council concerning the determination of sectors and subsectors deemed at risk of carbon leakage for the period 2021 to 2030 (OJ L 120, 8.5.2019, p. 2).
(43) Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p. 30).
(44) Commission Implementing Regulation (EU) 2018/2067 of 19 December 2018 on the verification of data and on the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council (OJ L 334, 31.12.2018, p. 94).
(45) Council Decision 2006/500/EC of 29 May 2006 on the conclusion by the European Community of the Energy Community Treaty (OJ L 198, 20.7.2006, p. 15).
(46) Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (OJ L 197, 25.7.2015, p. 24).
(47) Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
(48) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).
(49) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).
(50) Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (OJ L 82, 22.3.1997, p. 1).
(51) Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ L 123, 12.5.2016, p. 1).
(52) Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
(53) Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1).
(54) Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC (OJ L 302, 18.11.2010, p. 1).
(55) As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
(56) Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (OJ L 433I , 22.12.2020, p. 28).
(57) Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx
(58) Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
(59) EFTA: European Free Trade Association.
(60) Candidate countries and, where applicable, potential candidates from the Western Balkans.
(61) According to the official budget nomenclature.
(62) Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
(63) AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff; JPD= Junior Professionals in Delegations.
(64) Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines).
(65) See Articles 12 and 13 of Council Regulation (EU, Euratom) No 2093/2020 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027.