![Temporary decarbonisation fund [EU Legislation in Progress]](https://i0.wp.com/epthinktank.eu/wp-content/uploads/2026/03/EPRS-Briefing-782666-Temporary-decarbonisation-fund-FINAL.png?fit=1024%2C575&ssl=1)
Written by Liselotte Jensen.
CONTEXT
The carbon border adjustment mechanism (CBAM) is being implemented to create a level playing field on carbon pricing of specific goods within the EU single market. For CBAM-covered goods, free allowances under the EU′s emissions trading system (ETS) will be progressively phased out by 2034.
With the phase-out of free allowances in CBAM-covered goods, EU operators producing goods for export will be at a disadvantage in markets without similar carbon pricing.
The European Commission is proposing a temporary decarbonisation fund to support certain goods in the aluminium, fertilisers, iron and steel sectors. Other energy-intensive industries at continued risk of carbon leakage could also benefit. The fund would provide short-term support as a temporary bridge solution, pending a review in the context of the forthcoming revision of the EU ETS due in 2026.
Legislative proposal
2025/0418(COD) – Proposal for a regulation establishing the temporary decarbonisation fund – COM(2025) 990, 17 December 2025.
NEXT STEPS IN THE EUROPEAN PARLIAMENT
For the latest developments in this legislative procedure, see the Legislative Train Schedule: 2025/0418(COD)
Read the complete briefing on ‘Temporary decarbonisation fund‘ in the Think Tank pages of the European Parliament.
Comments are closed for this post.