The European Commission has proposed to create a fund that will gather CBAM revenues from member states and redistribute to European manufacturers that stand to lose competitiveness on the global stage as the free allocation of EUAs starts to be phased out in 2026. The new fund is limited to two years, the further protection of exporters against carbon leakage will be addressed in the upcoming ETS revision. This could mean reconsidering the gradual switch from free allocation to CBAM that is currently stipulated in the ETS Directive as a result of the fit-for-55 revision in 2023.
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