The tool aims to prevent price distortions in the EU internal market

The European Commission has proposed a provision on the temporary suspension of the carbon border adjustment mechanism (CBAM) for goods in “serious and unforeseen circumstances” – a new Article 27a in the relevant regulation. This is stated in the clarification of the EC’s Directorate-General for Taxation and Customs Union (TAXUD).

Article 27a was included in the amendment to EU Regulation 2023/956, published by the European Commission in December last year, but it has not yet been adopted by the co-legislators (the European Parliament and the Council of the EU).

Article 27a states that if the inclusion of a product in the scope of the CBAM causes serious damage to the EU internal market due to serious and unforeseen circumstances related to the impact on prices, the EC has the right to exclude this product from the scope of the CBAM and remove it from Annex 1 of the Regulation until these circumstances cease to exist.

Currently, the mechanism’s regulation does not allow for the suspension or removal of goods from the scope of the CBAM, which is why a proposal for a new temporary instrument has been put forward.

Article 27a may be applied retroactively after its adoption by the co-legislators.

Before taking action, the EC will have to conduct a formal assessment to verify that the conditions for intervention are met. If it confirms that there is a serious impact on the market, it will be able to act by adopting an appropriate delegated act.

The European Commission has clarified that retroactive application will have no financial implications for imports in 2026, as CBAM certificates will only be available for purchase from February 1, 2027. However, if the delegated act resulting from Article 27a applies after that date and CBAM declarants have purchased the relevant certificates corresponding to imports in 2026, they will be entitled to a refund of the price paid for the certificate.

The EC announced the development of Article 27a amid reports of the negative impact of CBAM on the fertilizer market. In particular, France and Italy last week called on the EC to exempt imported fertilizers from the carbon levy under the mechanism in order to maintain the competitiveness of local farmers. French and Italian officials, Euronews reported, are concerned that the agricultural sector will face a “significant increase” in the cost of importing these goods into the EU. In particular, France estimates the price increase due to the new tax at approximately 25%.

It should be recalled that in December 2025, the EU strengthened the cross-border carbon adjustment mechanism by adding a wide range of industrial goods to it, mostly those containing steel or aluminum. In total, this concerns 180 new products.