### (10) such a financial contribution should confer a benefit to an undertaking engaging in an economic activity in the internal market. a financial contribution that benefits an entity engaging in non-economic activities does not constitute a foreign subsidy. the existence of a benefit should be determined on the basis of comparative benchmarks , such as the investment practice of private investors , rates for financing obtainable on the market , a comparable tax treatment , or the adequate remuneration for a given good or service.. if no directly comparable benchmarks are available , existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods. ### (10) such a financial contribution or an economically equivalent support measure should confer a benefit to an undertaking engaging in an economic activity in the internal market. a financial contribution or an economically equivalent support measure that benefits an entity engaging in non-economic activities does not constitute a foreign subsidy. the existence of a benefit should be determined on the basis of comparative benchmarks , such as the investment practice of private investors , rates for financing obtainable on the market , a comparable tax treatment , or the adequate remuneration for a given good or service. if no directly comparable benchmarks are available , existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods.


### (10) such a financial contribution should confer a benefit to an undertaking engaging in an economic activity in the internal market. a financial contribution that benefits an entity engaging in non-economic activities does not constitute a foreign subsidy. the existence of a benefit should be determined on the basis of comparative benchmarks , such as the investment practice of private investors , rates for financing obtainable on the market , a comparable tax treatment , or the adequate remuneration for a given good or service.. if no directly comparable benchmarks are available , existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods. ### (10) such a financial contribution or economically equivalent support should confer a benefit to an undertaking engaging in an economic activity in the internal market. a financial contribution or economically equivalent support that benefit an entity engaging in non-economic activities do not constitute a foreign subsidy. the existence of a benefit should be determined on the basis of comparative benchmarks , such as the investment practice of private investors , rates for financing obtainable on the market , a comparable tax treatment , or the adequate remuneration for a given good or service. this assessment should also give due regard to any environmentally or socially harmful effects of such a benefit. if no directly comparable benchmarks are available , existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods.


### (16) the commission should take into account the positive effects of the foreign subsidy on the development of the relevant subsidised economic activity. the commission should weigh these positive effects against the negative effects of a foreign subsidy in terms of distortion on the internal market in order to determine , if applicable , the appropriate redressive measure or accept commitments. the balancing may also lead to the conclusion that no redressive measures should be imposed. categories of foreign subsidies that are deemed most likely to distort the internal market are less likely to have more positive than negative effects. ### (16) the commission should take into account the positive effects of the foreign subsidy on the development of the relevant subsidised economic activity , in particular as regards of its contribution to the union’s objectives and the positive social and environmental externalities of such subsidised activities. the commission should weigh these positive effects against the negative effects of a foreign subsidy in terms of distortion on the internal market in order to determine , if applicable , the appropriate redressive measure or accept commitments. the balancing may also lead to the conclusion that no redressive measures should be imposed. categories of foreign subsidies that are deemed most likely to distort the internal market are less likely to have more positive than negative effects.


### (21) the commission should have the power , on its own initiative , to examine any information on foreign subsidies. to this end , it is necessary to establish a procedure consisting of two steps , namely a preliminary review and an in-depth investigation. ### (21) the commission should have the power , on its own initiative , to examine any information on foreign subsidies. the commission should be able to act upon information received from any relevant source , including member states , member states’ trade associations and eu-wide social partners. to this end , it is necessary to establish a procedure consisting of two steps , namely a preliminary review and an in-depth investigation.


### (28) given the potentially significant impact of concentrations on the internal market , the commission should have the power , upon notification , to examine information on foreign financial contributions in the context of a proposed concentration. undertakings should not be allowed to implement the concentration prior to the conclusion of the commission’s review. ### (28) given the potentially significant impact of concentrations on the internal market , the commission should have the power , upon notification , to examine information on foreign subsidies in the context of a proposed concentration. undertakings should not be allowed to implement the concentration prior to the conclusion of the commission’s review.


### (33) the need to address distortive foreign subsidies is especially salient in public procurement , given its economic significance in the internal market and the fact that it is financed by taxpayer funds. the commission should have the power , upon notification prior to the award of a public contract or concession , to examine information on foreign financial contributions to the participating undertakings in the context of a public procurement procedure. prior notifications should be mandatory above a threshold set in this regulation to capture economically significant cases while minimising the administrative burden and not hindering the participation of smes in public procurement. that obligation of prior notification above a threshold should also apply to groups of economic operators referred to in article 26(2) of directive 2014/23/eu of the european parliament and of the council40 , article 19(2) of directive 2014/24/eu of the european parliament and of the council41 and article 37(2) of directive 2014/25/eu of the european parliament and of the council42 . it should also apply to the main subcontractors and the main suppliers of undertaking. ### (33) the need to address distortive foreign subsidies is especially salient in public procurement , given its economic significance in the internal market and the fact that it is financed by taxpayer funds. the commission should have the power , upon notification prior to the award of a public contract or concession , to examine information on foreign subsidies to the participating undertakings in the context of a public procurement procedure. prior notifications should be mandatory above a threshold set in this regulation to capture economically significant cases while minimising the administrative burden and not hindering the participation of smes in public procurement. that obligation of prior notification above a threshold should also apply to groups of economic operators referred to in article 26(2) of directive 2014/23/eu of the european parliament and of the council40 , article 19(2) of directive 2014/24/eu of the european parliament and of the council41 and article 37(2) of directive 2014/25/eu of the european parliament and of the council42 . it should also apply to the main subcontractors and the main suppliers of undertaking.


### (39) in the interest of transparency and legal certainty , it is appropriate to publish either in full or in a summary form all decisions adopted by the commission. ### (39) in the interest of transparency and legal certainty , it is appropriate to publish either in full or in a summary form all decisions adopted by the commission , as well as in-depth investigations and balancing assessments.


### (43) the implementation of this regulation by the union should comply with union law , the wto agreement and be consistent with commitments made under other trade and investment agreements to which the union or the member states are parties. ### (43) the implementation of this regulation by the union should comply with union law , be consistent with wto agreements and with commitments made under other trade and investment agreements to which the union or the member states are parties. this regulation should be without prejudice to the development of multilateral rules to address distortive subsidies.


### (48) in order to ensure a level playing field on the internal market also in the long term , with a view to ensuring adequate coverage of cases investigated both through notifications as well as ex officio , the power to adopt acts in accordance with article 290 of the treaty should be delegated to the commission in respect of amending the notification thresholds for concentrations and for public procurement procedures , exempting certain categories of undertakings from the notification obligations under this regulation , as well as amending the time limits for the preliminary review and the in-depth investigations of notified concentrations or notified financial contributions in the context of a public procurement procedure. in relation to financial contributions in the context of a public procurement procedure , the power to adopt such acts should be exercised in a way that takes into account the interests of smes. it is of particular importance that the commission carries out appropriate consultations during the preparations of those acts , including at expert level , and that those consultations be conducted in accordance with the principles laid down in the interinstitutional agreement of 13 april 2016 on better law-making47 . in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and the council should receive all documents at the same time as member states' experts , and their experts systematically should have access to meetings of commission expert groups dealing with the preparation of delegated acts. ### (48) in order to ensure a level playing field on the internal market also in the long term , with a view to ensuring adequate coverage of cases investigated both through notifications as well as ex officio , the power to adopt acts in accordance with article 290 of the treaty should be delegated to the commission in respect of specifying economically equivalent support measure to a financial contribution , establishing criteria for identifying actions that can be attributed to third countries , specifying the methodology underlying the balancing assessment , adopting a methodology for determining that a serious risk of substantial and irreparable damage to competition arises on the internal market , amending the notification thresholds for concentrations and for public procurement procedures , exempting certain categories of undertakings from the notification obligations under this regulation , as well as amending the time limits for the preliminary review and the in-depth investigations of notified concentrations or notified financial contributions or economically equivalent support measures in the context of a public procurement procedure. in relation to financial contributions or economically equivalent support measures in the context of a public procurement procedure , the power to adopt such acts should be exercised in a way that takes into account the interests of smes. it is of particular importance that the commission carries out appropriate consultations during the preparations of those acts , including at expert level , and that those consultations be conducted in accordance with the principles laid down in the interinstitutional agreement of 13 april 2016 on better law-making47 . in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and the council should receive all documents at the same time as member states' experts , and their experts systematically should have access to meetings of commission expert groups dealing with the preparation of delegated acts.


### (1) this regulation lays down rules and procedures for investigating foreign subsidies that distort the internal market and for redressing such distortions. such distortions may arise with respect to any economic activity , and in particular in concentrations and public procurement procedures. ### (1) this regulation lays down rules and procedures for investigating foreign subsidies that distort the internal market and for redressing such distortions with a view to ensuring a fair level-playing field. such distortions may arise with respect to any economic activity , and in particular in concentrations and public procurement procedures.


### (1) for the purpose of this regulation , a foreign subsidy shall be deemed to exist where a third country provides a financial contribution which confers a benefit to an undertaking engaging in an economic activity in the internal market and which is limited , in law or in fact , to an individual undertaking or industry or to several undertakings or industries. ### (1) for the purpose of this regulation , a foreign subsidy shall be deemed to exist where a third country provides a financial contribution or an economically equivalent support measure which confer a benefit to an undertaking engaging in an economic activity in the internal market and which is limited , in law or in fact , to an individual undertaking or industry or to several undertakings or industries.


### (1) for the purpose of this regulation , a foreign subsidy shall be deemed to exist where a third country provides a financial contribution which confers a benefit to an undertaking engaging in an economic activity in the internal market and which is limited , in law or in fact , to an individual undertaking or industry or to several undertakings or industries. ### (1) for the purpose of this regulation , a foreign subsidy shall be deemed to exist where a third country provides a financial contribution or an economically equivalent support which confers a benefit to an undertaking engaging in an economic activity in the internal market and which is limited , in law or in fact , to an individual undertaking or industry or to several undertakings or industries.


### the financial contribution provided by the third country shall include the financial contribution provided by: ### the financial contribution or an economically equivalent support measure provided by the third country shall include the financial contribution or an economically equivalent support measure provided by:


### the financial contribution provided by the third country shall include the financial contribution provided by: ### the financial contribution or any other economically equivalent support provided by the third country shall include the financial contribution or any other economically equivalent support provided by:


### (2) a foreign subsidy is unlikely to distort the internal market if its total amount is below eur 5 million over any consecutive period of three fiscal years. ### (2) a foreign subsidy is unlikely to distort the internal market if its total amount is below the de minimis threshold rule , laid down in commission regulation (eu) no 1407/2013 over any consecutive period of three fiscal years.


### (1) the commission shall , where warranted , balance the negative effects of a foreign subsidy in terms of distortion on the internal market with positive effects on the development of the relevant economic activity. ### (1) the commission shall , where warranted , balance the negative effects of a foreign subsidy in terms of distortion on the internal market with positive effects on the development of the relevant economic activity , including positive environmental and social externalities providing a contribution to eu policy objectives.


### (1) the commission shall , where warranted , balance the negative effects of a foreign subsidy in terms of distortion on the internal market with positive effects on the development of the relevant economic activity. ### (1) the commission shall , where warranted , balance the short and long- term negative effects of a foreign subsidy in terms of distortion on the internal market with positive effects on the development of the relevant economic activity including any positive environmental or social externalities.


### (2) the commission shall take into account the balancing between the negative and positive effects when deciding whether to impose redressive measures or to accept commitments , and the nature and level of those redressive measures or commitments. ### (2) the commission shall take into account the balancing between the negative and positive effects when deciding whether to adopt a decision to initiate an in-depth investigation as provided for in article 9 , impose redressive measures or to accept commitments , and the nature and level of those redressive measures or commitments.


### (1) to remedy the distortion on the internal market actually or potentially caused by a foreign subsidy , the commission may impose redressive measures. the undertaking concerned may also offer commitments. ### (1) to remedy the distortion on the internal market actually or potentially caused by a foreign subsidy , the commission shall impose redressive measures unless the balancing assessment referred to in article 5 determines that positive effects outweigh negative ones.


### the commission may on its own initiative examine information from any source regarding alleged distortive foreign subsidies. ### the commission may on its own initiative examine information from any source regarding alleged distortive foreign subsidies. the commission shall examine substantiated information submitted by member states , member states’ trade associations and eu-wide social partners.


### the commission may on its own initiative examine information from any source regarding alleged distortive foreign subsidies. ### the commission may on its own initiative examine information from any source regarding alleged distortive foreign subsidies. the commission shall examine information submitted by member states and social partners.


### (1) the commission shall seek all the information it considers necessary to assess , on a preliminary basis , whether the financial contribution under examination constitutes a foreign subsidy and whether it distorts the internal market. to that end , the commission may in particular: ### (1) the commission shall seek all the information it considers necessary to assess , on a preliminary basis , whether the financial contribution or the economically equivalent support measure under examination constitutes a foreign subsidy and whether it distorts the internal market. to that end , the commission may in particular:


### (3) where the commission , after a preliminary assessment , concludes that there are no sufficient grounds to initiate the in-depth investigation , either because there is no foreign subsidy or because there are no indications of an actual or potential distortion on the internal market , it shall close the preliminary review and inform the undertaking concerned. ### (3) where the commission , after a preliminary assessment , concludes that there are no sufficient grounds to initiate the in-depth investigation , either because there is no foreign subsidy or because there are no indications of an actual or potential distortion on the internal market , it shall close the preliminary review , inform the undertaking concerned and publish its preliminary assessment.


### (1) there are indications that a financial contribution constitutes a foreign subsidy and distorts the internal market; and ### (1) there are indications that a financial contribution or an economically equivalent support measure constitutes a foreign subsidy and distorts the internal market; and


### (1) the commission may require an undertaking concerned to provide all necessary information. ### (1) the commission shall require an undertaking concerned to provide all necessary information.


### (7) upon request of the commission , a member state shall in its own territory carry out any inspection or other fact-finding measure under its national law in order to establish whether there is a foreign subsidy distorting the internal market. ### (7) upon notification to the commission , a member state shall in its own territory carry out any inspection or other fact-finding measure under its national law in order to establish whether there is a foreign subsidy distorting the internal market.


### (7) upon request of the commission , a member state shall in its own territory carry out any inspection or other fact-finding measure under its national law in order to establish whether there is a foreign subsidy distorting the internal market. ### (7) upon notification of the commission , a member state shall in its own territory carry out any inspection or other fact-finding measure under its national law in order to establish whether there is a foreign subsidy distorting the internal market.


### (3) where an undertaking concerned , including a public undertaking which is directly or indirectly controlled by the state , fails to provide the necessary information to determine whether a financial contribution confers a benefit to it , that undertaking may be deemed to have received such benefit. ### (3) where an undertaking concerned , including a public undertaking which is directly or indirectly controlled by the state , fails to provide the necessary information to determine whether a financial contribution or an economically equivalent support measure confers a benefit to it , that undertaking may be deemed to have received such benefit.


### (1) the commission may impose by decision fines and periodic penalty payments where an undertaking concerned or an association of undertakings , intentionally or negligently: ### (1) the commission shall impose by decision fines and periodic penalty payments where an undertaking concerned or an association of undertakings , intentionally or negligently:


### the undertakings concerned received from third countries an aggregate financial contribution in the three calendar years prior to notification of more than eur 50 million. ### the undertakings concerned received from third countries an aggregate financial contribution in the three calendar years prior to notification of more than eur 25 million.


### the joint venture itself and its parent undertakings received from third countries an aggregate financial contribution in the three calendar years prior to notification of more than eur 50 million. ### the joint venture itself and its parent undertakings received from third countries an aggregate financial contribution in the three calendar years prior to notification of more than eur 25 million.


### (4) if the undertakings concerned fail to meet their obligation to notify , the commission may review a notifiable concentration in accordance with this regulation by requesting the notification of that concentration. in that case the commission shall not be bound by the time limits referred to in article 23(1) and (4). ### (4) if the undertakings concerned fail to meet their obligation to notify , the commission shall review a notifiable concentration in accordance with this regulation by requesting the notification of that concentration. in that case the commission shall not be bound by the time limits referred to in article 23(1) and (4).


### (2) for the purpose of article 28 , a notifiable foreign financial contribution in an eu public procurement procedure shall be deemed to arise where the estimated value of that public procurement is equal or greater than eur 250 million. ### (2) for the purpose of article 28 , a notifiable foreign financial contribution in an eu public procurement procedure shall be deemed to arise where the estimated value of that public procurement is equal or greater than eur 100 million.


### (7) the principles governing public procurement , including proportionality , non-discrimination , equal treatment , and transparency , shall be observed as regards all undertakings involved in the public procurement procedure. the investigation of foreign subsidies pursuant to this regulation shall not result in the contracting authority or the contracting entity treating the undertaking concerned in a way that is contrary to those principles. ### (7) the principles governing public procurement , including proportionality , non-discrimination , equal treatment , transparency and compliance with obligations relating to applicable due diligence , environmental , social and labour law and standards , or governance , shall be observed as regards all undertakings involved in the public procurement procedure. the investigation of foreign subsidies pursuant to this regulation shall not result in the contracting authority or the contracting entity treating the undertaking concerned in a way that is contrary to those principles.


### (1) where the information available substantiates a reasonable suspicion that foreign subsidies in a particular sector , for a particular type of economic activity or based on a particular subsidy instrument may distort the internal market , the commission may conduct a market investigation into the particular sector , the particular type of economic activity or into the use of the subsidy instrument concerned. in the course of that market investigation , the commission may request the undertakings or associations of undertakings concerned to supply the necessary information and may carry out the necessary inspections. the commission may also request the member state or third country concerned to supply information. ### (1) where the information available substantiates a reasonable suspicion that foreign subsidies in a particular sector , for a particular type of economic activity or based on a particular subsidy instrument may distort the internal market , the commission may conduct a market investigation into the particular sector , the particular type of economic activity or into the use of the subsidy instrument concerned. in the course of that market investigation , the commission may request the undertakings or associations of undertakings concerned to supply the necessary information and may carry out the necessary inspections. the commission may also request the member state or third country concerned to supply information , or consult member states’ trade associations and eu-wide social partners.


### (1) where the information available substantiates a reasonable suspicion that foreign subsidies in a particular sector , for a particular type of economic activity or based on a particular subsidy instrument may distort the internal market , the commission may conduct a market investigation into the particular sector , the particular type of economic activity or into the use of the subsidy instrument concerned. in the course of that market investigation , the commission may request the undertakings or associations of undertakings concerned to supply the necessary information and may carry out the necessary inspections. the commission may also request the member state or third country concerned to supply information. ### (1) where the information available substantiates a reasonable suspicion that foreign subsidies in a particular sector , for a particular type of economic activity or based on a particular subsidy instrument may distort the internal market , the commission shall conduct a market investigation into the particular sector , the particular type of economic activity or into the use of the subsidy instrument concerned. in the course of that market investigation , the commission may request the undertakings or associations of undertakings concerned to supply the necessary information and may carry out the necessary inspections. the commission may also request the member state or third country concerned to supply information.


### (2) the commission may publish a report on the results of its market investigation into particular sectors , particular types of economic activity or particular subsidy instruments and invite comments from interested parties. ### (2) the commission shall publish a report on the results of its market investigation into particular sectors , particular types of economic activity or particular subsidy instruments and invite comments from interested parties.


### a financial contribution shall include: ### a financial contribution shall include inter alia:


### (4) a foreign subsidy enabling an undertaking to submit an unduly advantageous tender , on the basis of which the undertaking would be awarded the public contract. ### (4) a foreign subsidy enabling an undertaking to submit an unduly advantageous tender or an abnormally low tender as defined in the directive 2014/24/eu , on the basis of which the undertaking would be awarded the public contract.


### (5) if an undertaking offers commitments which fully and effectively remedy the distortion on the internal market , the commission may accept them and make them binding on the undertaking in a decision with commitments according to article 9(3). ### (5) if an undertaking offers commitments which fully and effectively remedy the distortion on the internal market , the commission shall accept them and make them binding on the undertaking in a decision with commitments according to article 9(3).


### (2) where the commission finds that a foreign subsidy distorts the internal market pursuant to articles 3 to 5 , it may impose redressive measures (‘decision with redressive measures’). ### (2) where the commission finds that a foreign subsidy distorts the internal market pursuant to articles 3 to 5 , it shall impose redressive measures (‘decision with redressive measures’).


### (1) the commission may conduct the necessary inspections of undertakings. ### (1) the commission shall conduct the necessary inspections of undertakings.


### (1) the commission may take a decision pursuant to article 8 or article 9 on the basis of the facts available , if an undertaking concerned or a third country: ### (1) the commission shall take a decision pursuant to article 8 or may take a decision pursuant to article 9 on the basis of the facts available , if an undertaking concerned or a third country:


### the commission may revoke a decision taken pursuant to article 9(2) , (3) or (4) and adopt a new decision in any of the following cases: ### the commission shall revoke a decision taken pursuant to article 9(2) , (3) or (4) and adopt a new decision in any of the following cases:


### the acquired undertaking or at least one of the merging undertakings is established in the union and generates an aggregate turnover in the union of at least eur 500 million; and ### the acquired undertaking or at least one of the merging undertakings is established in the union and generates an aggregate turnover in the union of at least eur 250 million; and


### (3) the commission may impose by decision on the undertakings concerned fines not exceeding 10 % of their aggregate turnover in the preceding business year where they , intentionally or negligently , fail to notify a subsidy in accordance with article 28 during the public procurement procedure. ### (3) the commission may impose by decision on the undertakings concerned fines not exceeding 10 % of their aggregate turnover in the preceding business year where they fail to notify a subsidy in accordance with article 28 during the public procurement procedure.


### (3) the commission may use the information obtained from such market investigations in the framework of procedures under this regulation. ### (3) the commission shall use the information obtained from such market investigations in the framework of procedures under this regulation.


### (8) as long as a significant number of the union’s international partners have policy approaches that do not result in the same level of climate ambition , there is a risk of carbon leakage. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less ghg emissions intensive products. that could lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels. ### (8) as long as a significant number of the union’s international partners have policy approaches that do not result in the same level of climate ambition , and as the union increases its climate ambition , there could be a risk of carbon leakage. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less ghg emissions intensive products. that could lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels.


### (10) existing mechanisms to address the risk of carbon leakage in sectors or sub-sectors at risk of carbon leakage are the transitional free allocation of eu ets allowances and financial measures to compensate for indirect emission costs incurred from ghg emission costs passed on in electricity prices respectively laid down in articles 10a(6) and 10b of directive 2003/87/ec. however , free allocation under the eu ets weakens the price signal that the system provides for the installations receiving it compared to full auctioning and thus affects the incentives for investment into further abatement of emissions. ### (10) existing mechanisms to address the risk of carbon leakage in sectors or sub-sectors at risk of carbon leakage are the transitional free allocation of eu ets allowances and financial measures to compensate for indirect emission costs incurred from ghg emission costs passed on in electricity prices respectively laid down in articles 10a(6) and 10b of directive 2003/87/ec. however , free allocation and compensation schemes for indirect emission costs under the eu ets undermine the polluter-pays principle and weakens the price signal that the system provides for the installations receiving it compared to full auctioning and thus heavily reduces the affects the incentives for investment into further abatement of emissions. moreover , the free allowances under the eu ets as well as compensation of indirect emission costs weaken the cbam’s compatibility with wto rules. the cbam should therefore be introduced in parallel with the phasing out of the free allowances and state aid compensation schemes for indirect emission costs for the affected sectors.


### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. ### (11) the cbam should replace these existing carbon leakage mechanisms by terminating derogations from the application of the‘polluter pays principle’ , while ensuring equal treatment between eu and non-eu products through equivalent carbon pricing for imports and domestic products. free allocations and indirect cost compensation should cease to apply as of 31 december 2023.


### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. ### (11) the cbam seeks to replace the existing carbon leakage mechanisms , by ending the exemptions to the application of the ‘polluter pays’ principle granted until now to european industry and by simultaneously creating fairness between the union’s producers and those of third countries , by ensuring equivalent carbon pricing for imports and domestic products. the allocation of free allowances and the compensation of indirect emission costs should come to an end from the full application of the cbam from 1 january 2025.


### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. ### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure that the application of eu ets allowances allocated free of charge and of the cbam does not result in more favourable treatment for union goods compared to goods imported into the customs territory of the union , free allocation is to end upon application of the cbam in 2025.


### (12) while the objective of the cbam is to prevent the risk of carbon leakage , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated. ### (12) while the objective of the cbam is to prevent possible the risk of carbon leakage and ensuring the polluter-pays principle is applied to covered sectors , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated.


### (12) while the objective of the cbam is to prevent the risk of carbon leakage , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated. ### (12) while the objective of the cbam is to lower global carbon emissions and support the implementation of the goals of the paris agreement , including by preventing any risk of carbon leakage , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated.


### (13) as an instrument to prevent carbon leakage and reduce ghg emissions the cbam should ensure that imported products are subject to a regulatory system that applies carbon costs equivalent to the ones that otherwise would have been borne under the eu ets. the cbam is a climate measure which should prevent the risk of carbon leakage and support the union’s increased ambition on climate mitigation , while ensuring wto compatibility. ### (13) as an instrument to prevent carbon leakage and reduce ghg emissions the cbam should ensure that imported products are subject to a regulatory system that applies carbon costs equivalent to the ones that otherwise would have been borne under the eu ets. the cbam is a climate measure which should prevent the risk of carbon leakage and support the union’s increased ambition on climate mitigation , while ensuring wto compatibility. support measures for farmers in adapting to changes in fertiliser price or sourcing shall be made available under existing appropriate instruments , notably the cap and the nextgenerationeu , rather than compromising the efficacy and wto compatibility of the cbam itself.


### (17) the ghg emissions to be regulated by the cbam should correspond to those ghg emissions covered by annex i to the eu ets in directive 2003/87/ec , namely carbon dioxide (‘co2’) as well as , where relevant , nitrous oxide (‘n2o’) and perfluorocarbons (‘pfcs’). the cbam should initially apply to direct emissions of those ghg from the production of goods up to the time of import into the customs territory of the union , and after the end of a transition period and upon further assessment , as well to indirect emissions , mirroring the scope of the eu ets. ### (17) the ghg emissions to be regulated by the cbam should correspond to those ghg emissions covered by annex i to the eu ets in directive 2003/87/ec , namely carbon dioxide (‘co2’) as well as , where relevant , nitrous oxide (‘n2o’) and perfluorocarbons (‘pfcs’).the cbam should apply to direct emissions of those ghg from the production of goods up to the time of import into the customs territory of the union , as well to indirect emissions , mirroring the scope of the eu ets.


### (17) the ghg emissions to be regulated by the cbam should correspond to those ghg emissions covered by annex i to the eu ets in directive 2003/87/ec , namely carbon dioxide (‘co2’) as well as , where relevant , nitrous oxide (‘n2o’) and perfluorocarbons (‘pfcs’). the cbam should initially apply to direct emissions of those ghg from the production of goods up to the time of import into the customs territory of the union , and after the end of a transition period and upon further assessment , as well to indirect emissions , mirroring the scope of the eu ets. ### (17) the ghg emissions to be regulated by the cbam should correspond to those ghg emissions covered by annex i to the eu ets in directive 2003/87/ec , namely carbon dioxide (‘co2’) as well as , where relevant , nitrous oxide (‘n2o’) and perfluorocarbons (‘pfcs’). the cbam should initially apply to direct emissions of those ghg from the production of goods up to the time of import into the customs territory of the union , and after the end of a transition period , as well to indirect emissions , mirroring the scope of the eu ets.


### (28) whilst the ultimate objective of the cbam is a broad product coverage , it would be prudent to start with a selected number of sectors with relatively homogeneous products where there is a risk of carbon leakage. union sectors deemed at risk of carbon leakage are listed in commission delegated decision 2019/70842 . ### (28) whilst the ultimate objective of the cbam is a broad product coverage , it would be prudent to start with a selected number of sectors with relatively homogeneous products where there is a risk of carbon leakage. union sectors deemed at risk of carbon leakage are listed in commission delegated decision 2019/70842 . before the end of the transitional period , the commission will present a new legislation proposal with a view to extending the scope of this regulation to goods other than those listed in annex i , including oil-refineries , paper , glass , plastics , and downstream products using goods covered by this regulation.


### (28) whilst the ultimate objective of the cbam is a broad product coverage , it would be prudent to start with a selected number of sectors with relatively homogeneous products where there is a risk of carbon leakage. union sectors deemed at risk of carbon leakage are listed in commission delegated decision 2019/70842 . ### (28) whilst the ultimate objective of the cbam is to cover those products that contribute significantly to climate change and face a genuine risk of carbon leakage , it would be prudent to start with a selected number of sectors with relatively homogeneous products where there is a potential risk of carbon leakage. before the end of the transition period , the commission should propose to extend the scope of this regulation to other products than those listed in annex i , including but not limited to oil , paper , glass , and upstream and downstream products , as well as the components of finished products that use products covered by this regulation. the commission should take account of the potential social impacts of extending the scope and propose measures to minimise these effects , where necessary.


### (50) a transitional period should apply during the period 2023 until 2025. a cbam without financial adjustment should apply , with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disruptive impacts on trade. declarants should have to report on a quarterly basis the actual embedded emissions in goods imported during the transitional period , detailing direct and indirect emissions as well as any carbon price paid abroad. ### (50) a transitional period should apply during the period 2023 until 2024. a cbam without financial adjustment should apply , with the objective to facilitate a smooth roll out of the mechanism hence reducing the risk of disruptive impacts on trade. declarants should have to report on a quarterly basis the actual embedded emissions in goods imported during the transitional period , detailing direct and indirect emissions as well as any carbon price paid abroad.


### (51) to facilitate and ensure a proper functioning of the cbam , the commission should provide support to the competent authorities responsible for the application of this regulation in carrying out their obligations. ### (51) to facilitate and ensure a proper functioning of the cbam , the commission should provide support to the competent authorities responsible for the application of this regulation in carrying out their obligations. before the end of the transition period , the commission should evaluate the governance system with a view to setting up a new european cbam authority that would coordinate the work of the competent authorities , help to centralise and exchange data and serve as a single point of contact for operators , authorised declarants and any other interested parties , with all the relevant information concerning the implementation of this regulation.


### (52) the commission should evaluate the application of this regulation before the end of the transitional period and report to the european parliament and the council. the report of the commission should in particular focus on possibilities to enhance climate actions towards the objective of a climate neutral union by 2050. the commission should , as part of that evaluation , initiate collection of information necessary to possibly extend the scope to indirect emissions , as well as to other goods and services at risk of carbon leakage , and to develop methods of calculating embedded emissions based on the environmental footprint methods47 . ### (52) the commission should collect information , evaluate the application of this regulation and develop methods of calculating embedded emissions based on the environmental footprint methods before the end of the transitional period and submit a report and a legislative proposal to the european parliament and the council. the legislative proposal should focus on enhancing climate actions towards the objective of a climate neutral union by 2050. the commission should , propose to extend the scope to other goods and services at risk of carbon leakage , including oil refineries , paper , glass , plastics aiming at matching the same product scope as ets , as well as to downstream products using goods covered by the cbam. the report should provide an assessment of the governance system of the regulation , it should also evaluate the risks of circumvention and fraud identified and , if appropriate , propose measures to address them.


### (55) as the cbam aims to encourage cleaner production processes , the eu stands ready to work with low and middle-income countries towards the de-carbonisation of their manufacturing industries. moreover , the union should support less developed countries with the necessary technical assistance in order to facilitate their adaptation to the new obligations established by this regulation. ### (55) as the cbam aims to encourage cleaner production processes , the eu stands ready to work with low and middle-income countries towards the de-carbonisation of their manufacturing industries and provide them. with the necessary technical assistance and with the sharing or ghg-abating technology in order to facilitate their adaptation to the new obligations established by this regulation. least developed countries have limited capacity to decarbonise their industries , and compliance with the cbam obligations would be highly demanding for them. moreover , manufacturing capacities and associated emissions in those countries are negligible on a global scale. in order not to place a disproportionate burden on those countries , and in line with the ‘common but differentiated responsibility’ principle , as stated in art 2. 2. of the paris agreement , the cbam will not apply to them. however , to prevent risks of circumvention , the commission will set up a market surveillance monitoring system and will take measures , where appropriate.


### 3. the mechanism will progressively become an alternative to the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , notably the allocation of allowances free of charge in accordance with article 10a of that directive. ### 3. the mechanism shall be an alternative to the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , notably the allocation of allowances free of charge and compensation of indirect costs in accordance with articles 10a and 10b of that directive.


### 3. the mechanism will progressively become an alternative to the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , notably the allocation of allowances free of charge in accordance with article 10a of that directive. ### 3. the mechanism is an alternative to the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , notably the allocation of allowances free of charge and compensation of indirect emission costs in accordance with article 10a and article 10a (6) of that directive.


### 3. the mechanism will progressively become an alternative to the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , notably the allocation of allowances free of charge in accordance with article 10a of that directive. ### 3. the mechanism will replace the mechanisms established under directive 2003/87/ec to prevent the risk of carbon leakage , namely the allocation of allowances free of charge in accordance with article 10a of that directive.


### 1. the commission shall collect the information necessary with a view to extending the scope of this regulation to indirect emissions and goods other than those listed in annex i , and develop methods of calculating embedded emissions based on environmental footprint methods. ### 1. the commission shall collect the information necessary to develop methods of calculating embedded emissions based on environmental footprint methods.


### 2. before the end of the transitional period , the commission shall present a report to the european parliament and the council on the application of this regulation. the report shall contain , in particular , the assessment of the possibilities to further extend the scope of embedded emissions to indirect emissions and to other goods at risk of carbon leakage than those already covered by this regulation , as well as an assessment of the governance system. it shall also contain the assessment of the possibility to further extend the scope to embedded emissions of transportation services as well as to goods further down the value chain and services that may be subject to the risk of carbon leakage in the future. ### 2. before the end of the transitional period , the commission shall present a report to the european parliament and the council on the application of this regulation. the report shall contain , in particular:


### ix coordination with free allocation of allowances under the eu ets ### ix termination with free allocation of allowances under the eu ets


### ix coordination with free allocation of allowances under the eu ets ### discontinuation of free allocation of allowances under the eu ets


### 1. the cbam certificates to be surrendered in accordance with article 22 shall be adjusted to reflect the extent to which eu ets allowances are allocated free of charge in accordance with article 10a of directive 2003/87/ec to installations producing , within the union , the goods listed in annex i. ### 1. the cbam certificates to be surrendered in accordance with article 22 reflect the price paid by the installations producing within the union territory and being covered by the eu ets in accordance with directive xxxx/xx/xx(revised eu ets) , which will provide for a termination of free allocation of allowances as of the date referred to in paragraph 3(d) of article 36 of this regulation.


### 1. the cbam certificates to be surrendered in accordance with article 22 shall be adjusted to reflect the extent to which eu ets allowances are allocated free of charge in accordance with article 10a of directive 2003/87/ec to installations producing , within the union , the goods listed in annex i. ### 1. no free allocation shall be given in relation to the production within the union of goods listed in annex i as from the date of application of the cbam , as provided in article 36(3).


### articles 32 to 34 shall apply until 31 december 2025. ### articles 32 to 34 shall apply until 31 december 2024.


### article 35 shall apply until 28 february 2026. ### article 35 shall apply until 28 february 2025.


### articles 5 and 17 shall apply from 1 september 2025. ### articles 5 and 17 shall apply from 1 september 2024.


### articles 4 , 6 , 7 , 8 , 9 , 14 , 15 , 16 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 and 31 shall apply from 1 january 2026. ### articles 4 , 6 , 7 , 8 , 9 , 14 , 15 , 16 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 and 31 shall apply from 1 january 2025.


### 1. the commission shall calculate the price of cbam certificates as the average price of the closing prices of eu ets allowances on the common auction platform in accordance with the procedures laid down in commission regulation (eu) no 1031/201054 for each calendar week. ### 1. the commission shall calculate the price of cbam certificates as the sum of the price of direct and indirect emissions. the price of direct emissions shall correspond to the average price of the closing prices of eu ets allowances on the common auction platform in accordance with the procedures laid down in commission regulation (eu) no 1031/201054 for each calendar week.


### 3. the commission is empowered to adopt implementing acts to further define the methodology to calculate the average price of cbam certificates and practical arrangements for the publication of the price. those implementing acts shall be adopted in accordance with the examination procedure referred to in article 29(2). ### 3. the price of indirect emissions shall be determined in the delegated acts referred to in article 7.(7a). the commission is also empowered to adopt implementing acts to further define the methodology to calculate the average price of cbam certificates and practical arrangements for the publication of the price. those implementing acts shall be adopted in accordance with the examination procedure referred to in article 29(2).


### 5. where the commission , taking into account the relevant data , reports and statistics , including when provided by the customs authorities of member states , has sufficient reasons to believe that the circumstances referred to in paragraph 3 are occurring in one or more member states , it is empowered to adopt delegated acts in accordance with article 28 to supplement the scope of this regulation in order to include slightly modified products for anti-circumvention purposes. ### 5. where the commission , taking into account the relevant data , reports and statistics , including when provided by the customs authorities of member states , has sufficient reasons to believe that the circumstances referred to in paragraph 2 are occurring in one or more member states , it can proceed according to the following options:


### 2. the commission is empowered to adopt implementing acts laying down a calculation methodology for the reduction referred to in paragraph 1. those implementing acts shall be adopted in accordance with the examination procedure referred to in article 29(2). ### deleted


### 6. the commission is empowered to adopt implementing acts concerning the information to be reported , the procedures for communicating the information referred to in paragraph 3 and the conversion of the carbon price paid in foreign currency into euro at yearly average exchange rate. the commission is also empowered to adopt implementing acts to further define the necessary elements of the calculation method set out in annex iii , including determining system boundaries of production processes , emission factors , installation-specific values of actual emissions and their respective application to individual goods as well as laying down methods to ensure the reliability of data , including the level of detail and the verification of this data. the commission is further empowered to adopt implementing acts to develop a calculation method for indirect emissions embedded in imported goods. ### 6. the commission is empowered to adopt implementing acts concerning the information to be reported , the procedures for communicating the information referred to in paragraph 3 and the conversion of the carbon price paid in foreign currency into euro at yearly average exchange rate. the commission is also empowered to adopt implementing acts to further define the necessary elements of the calculation method set out in annex iii , including determining system boundaries of production processes , emission factors , installation-specific values of actual emissions and their respective application to individual goods as well as laying down methods to ensure the reliability of data , including the level of detail and the verification of this data.


### (14) this regulation should apply to goods imported into the customs territory of the union from third countries , except where their production has already been subject to the eu ets , whereby it applies to third countries or territories , or to a carbon pricing system fully linked with the eu ets. ### (14) this regulation should apply to goods imported into the customs territory of the union from third countries , except where their production has already been subject to the eu ets , whereby it applies to third countries or territories , or to a carbon pricing system fully linked with the eu ets. this regulation should also not apply to third countries classified as “least-developed” by the united nations.


### (18) the eu ets and the cbam have a common objective of pricing ghg emissions embedded in the same sectors and goods through the use of specific allowances or certificates. both systems have a regulatory nature and are justified by the need to curb ghg emissions , in line with the environmental objective set out in union. ### (18) the eu ets and the cbam have a common objective of pricing ghg emissions embedded in the same sectors and goods through the use of specific allowances or certificates. both systems have a regulatory nature and are justified by the need to curb ghg emissions , in line with polluter-pays principle , the environmental objective set out in union and paris agreement.


### (34) however , aluminium products should be included in the cbam as they are highly exposed to carbon leakage. moreover , in several industrial applications they are in direct competition with steel products because of characteristics closely resembling those of steel products. inclusion of aluminium is also relevant as the scope of the cbam may be extended to cover also indirect emissions in the future. ### (34) however , aluminium products should be included in the cbam as they are highly exposed to carbon leakage. moreover , in several industrial applications they are in direct competition with steel products because of characteristics closely resembling those of steel products. inclusion of aluminium is also relevant as the scope of the cbam will be extended to cover also indirect emissions in the future.


### (49) once third countries will be closely integrated into the union electricity market via market coupling , technical solutions should be found to ensure the application of the cbam to electricity exported from such countries into the customs territory of the union. if technical solutions cannot be found , third countries that are market coupled should benefit from a time limited exemption from the cbam until at the latest 2030 with regard solely to the export of electricity , provided that certain conditions are satisfied. however , those third countries should develop a roadmap and commit to implement a carbon pricing mechanism providing for an equivalent price as the eu ets , and should commit to achieving carbon neutrality by 2050 [as well as?] to align with union legislation in the areas of environment , climate , competition and energy. that exemption should be withdrawn at any time if there are reasons to believe that the country in question does not fulfil its commitments or it has not adopted by 2030 an ets equivalent to the eu ets. ### (49) once third countries will be closely integrated into the union electricity market via market coupling , technical solutions should be found to ensure the application of the cbam to electricity exported from such countries into the customs territory of the union. if technical solutions cannot be found , third countries that are market coupled should benefit from a time limited exemption from the cbam until at the latest 2030 with regard solely to the export of electricity , provided that certain conditions are satisfied , including the commitment to phase out coal-based electricity production by 2030 for oecd members at the latest , the adoption of effective administrative mechanisms to enforce implementation of the union electricity market legislation , and the fulfilment of eu recognised nuclear safety levels , among others. however , those third countries should develop a roadmap and commit to implement a carbon pricing mechanism providing for an equivalent price as the eu ets , and should commit to achieving carbon neutrality by 2050 as well as to align with union legislation in the areas of environment , climate , competition and energy. that exemption should be withdrawn at any time if there are reasons to believe that the country in question does not fulfil its commitments or it has not adopted by 2030 an ets equivalent to the eu ets.


### 1. this regulation establishes a carbon border adjustment mechanism (the ‘cbam’) for addressing greenhouse gas emissions embedded in the goods referred to in annex i , upon their importation into the customs territory of the union , in order to prevent the risk of carbon leakage. ### 1. this regulation establishes a carbon border adjustment mechanism (the ‘cbam’) for addressing greenhouse gas emissions embedded in the goods referred to in annex i , upon their importation into the customs territory of the union , in order to prevent the risk of carbon leakage and incentivise the reduction of ghg emissions in sectors covered by this regulation within the union and in third countries. cbam shall contribute to delivering on the european green deal and european climate law.


### 1. this regulation establishes a carbon border adjustment mechanism (the ‘cbam’) for addressing greenhouse gas emissions embedded in the goods referred to in annex i , upon their importation into the customs territory of the union , in order to prevent the risk of carbon leakage. ### 1. this regulation establishes a carbon border adjustment mechanism (the ‘cbam’) for addressing greenhouse gas emissions embedded in the goods referred to in annex i , upon their importation into the customs territory of the union , in order to reduce global carbon emissions and support the implementation of the goals of the paris agreement by preventing any risk of carbon leakage.


### the third country or territory has concluded an agreement with the union , setting out an obligation to apply the union law in the field of electricity , including the legislation on the development of renewable energy sources , as well as other rules in the field of energy , environment and competition; ### the third country or territory has concluded an agreement with the union , setting out an obligation to apply the union law in the field of electricity , including the legislation on the energy efficiency policies and development of renewable energy sources , as well as other rules in the field of energy , environment , notably on large combustion plants and/or industrial emission as well as water management and competition;


### (16) ‘embedded emissions’ mean direct emissions released during the production of goods , calculated pursuant to the methods set out in annex iii; ### (16) ‘embedded emissions’ mean direct and indirect emissions released during the production of goods , calculated pursuant to the methods set out in annex iii and during the production of the energy consumed by the producer of goods pursuant to the methods to be defined by the commission in accordance with article 7(7a);


### 1. embedded emissions in goods shall be calculated pursuant to the methods set out in annex iii. ### 1. direct emissions in goods shall be calculated pursuant to the methods set out in annex iii.


### 2. embedded emissions in goods other than electricity shall be determined based on the actual emissions in accordance with the methods set out in annex iii , points 2 and 3. when actual emissions cannot be adequately determined , the embedded emissions shall be determined by reference to default values in accordance with the methods set out in annex iii , point 4.1. ### 2. direct emissions in goods other than electricity shall be determined based on the actual emissions in accordance with the methods set out in annex iii , points 2 and 3. when actual emissions cannot be adequately determined , the embedded emissions shall be determined by reference to default values in accordance with the methods set out in annex iii , point 4.1.


### 3. embedded emissions in imported electricity shall be determined by reference to default values in accordance with the method set out in annex iii , point 4.2 , unless the authorised declarant chooses to determine the embedded emissions based on the actual emissions in accordance with that annex , point 5. ### 3. embedded emissions in imported electricity shall be determined by reference to default values in accordance with the method set out in annex iii , point 4.2 or by the embedded emissions based on the actual emissions in accordance with that annex , point 5. the determination of embedded emissions based on actual emissions shall be the preferred option


### 7. the implementing acts referred to in paragraph 6 shall be adopted in accordance with the examination procedure referred to in article 29(2). ### 7. the implementing acts referred to in paragraph 6 shall be adopted in accordance with the examination procedure referred to in article 29(2) and only after the determined union-wide ex-ante benchmarks are reviewed in view of modifying the definitions and system boundaries of existing product benchmarks as determined in article 10a , paragraph 12 of the eu ets revision (2021/0211).


### the actual total embedded emissions , expressed in tonnes of co2e emissions per megawatt-hour of electricity or for other goods in tonne of co2e emissions per tonne of each type of goods , calculated in accordance with the method set out in annex iii; ### the actual total embedded direct emissions , expressed in tonnes of co2e emissions per megawatt-hour of electricity or for other goods in tonne of co2e emissions per tonne of each type of goods , calculated in accordance with the method set out in annex iii;


### the actual total embedded indirect emissions , expressed in tonnes of co2e emissions per tonne of each type of other goods than electricity , calculated in accordance with a method set out in an implementing act referred to in paragraph 6; ### the actual total embedded indirect emissions , expressed in tonnes of co2e emissions per tonne of each type of other goods than electricity , calculated in accordance with a method set out in the delegated acts referred to in article 7(7a);


### (2) the paris agreement33 , adopted in december 2015 under the united nations framework convention on climate change (‘unfccc’) entered into force in november 2016. the parties to the paris agreement , in its article 2 , have agreed to hold the increase in the global average temperature well below 2°c above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°c above pre-industrial levels. ### (2) the paris agreement , adopted in december 2015 under the united nations framework convention on climate change (unfccc) entered into force in november 2016. by adopting the glasgow climate pact its parties recognised that limiting the increase in the global average temperature 1 ,5 °c above pre-industrial levels would significantly reduce the risks and impacts of climate change , and committed to strengthen their 2030 targets by the end of 2022 to close the ambition gap.


### (30) the use of the first criterion allows listing the following industrial sector in terms of cumulated emissions: iron and steel , refineries , cement , organic basic chemicals , and fertilisers. ### (30) the use of the first criterion allows listing the following industrial sector in terms of cumulated emissions: iron and steel , refineries , cement , organic basic chemicals , hydrogen , polymers and fertilisers.


### (32) in particular , organic chemicals are not included in the scope of this regulation due to technical limitations that do not allow to clearly define the embedded emissions of imported goods. for these goods the applicable benchmark under the eu ets is a basic parameter , which does not allow for an unambiguous allocation of emissions embedded in individual imported goods. a more targeted allocation to organic chemicals will require more data and analysis. ### deleted


### (32) in particular , organic chemicals are not included in the scope of this regulation due to technical limitations that do not allow to clearly define the embedded emissions of imported goods. for these goods the applicable benchmark under the eu ets is a basic parameter , which does not allow for an unambiguous allocation of emissions embedded in individual imported goods. a more targeted allocation to organic chemicals will require more data and analysis. ### (32) in particular , organic chemicals are not included in the scope of this regulation due to technical limitations that do not allow to clearly define the embedded emissions of imported goods. for these goods the applicable benchmark under the eu ets is a basic parameter , which does not allow for an unambiguous allocation of emissions embedded in individual imported goods. a more targeted allocation to organic chemicals will require more data and analysis , and a report assessing the possibilities to extend the scope to include organic chemicals is to be provided by the end of the transition period.


### (45) the physical characteristics of electricity as a product , in particular the impossibility to follow the actual flow of electrons , justifies a slightly different design for the cbam. default values should be used as a standard approach and it should be possible for authorised declarants to claim the calculation of their cbam obligations based on actual emissions. electricity trade is different from trade in other goods , notably because it is traded via interconnected electricity grids , using power exchanges and specific forms of trading. market coupling is a densely regulated form of electricity trade which allows to aggregate bids and offers across the union. ### (45) the physical characteristics of electricity as a product , in particular the impossibility to follow the actual flow of electrons , justifies a slightly different design for the cbam. but default values should not be used as a standard approach and it should be possible for authorised declarants to claim the calculation of their cbam obligations based on actual emissions. electricity trade is different from trade in other goods , notably because it is traded via interconnected electricity grids , using power exchanges and specific forms of trading. market coupling is a densely regulated form of electricity trade which allows to aggregate bids and offers across the union.


### (48) integration of third countries into the union electricity market is an important drive for those countries to accelerate their transition to energy systems with high shares of renewable energies. market coupling for electricity , as set out in commission regulation (eu) 2015/122246 , enables third countries to better integrate electricity from renewable energies into the electricity market , to exchange such electricity in an efficient manner within a wider area , balancing supply and demand with the larger union market , and reduce the carbon intensity of their electricity generation. integration of third countries into the union electricity market also contributes to the security of electricity supplies in those countries and in the neighbouring member states. ### (48) integration of third countries into the union electricity market is an important drive for those countries to accelerate their transition to energy systems with high shares of renewable energies. market coupling for electricity , as set out in commission regulation (eu) 2015/122246 , enables third countries to better integrate electricity from renewable energies into the electricity market , to exchange such electricity in an efficient manner within a wider area , balancing supply and demand with the larger union market , and reduce the carbon intensity of their electricity generation. integration of third countries into the union electricity market also contributes to the security of electricity supplies in those countries and in the neighbouring member states. electricity produced in third countries’ nuclear plants that do not meet the eu recognised nuclear safety levels and the standards of responsible and safe management of spent fuel and radioactive waste should be prevented from reaching the eu electricity market.


### 3. by way of derogation from paragraphs 1 and 2 , this regulation does not apply to goods originating in countries and territories listed in annex ii , section a. ### 3. by way of derogation from paragraphs 1 and 2 , this regulation does not apply to goods originating in countries and territories listed in annex ii , section a and in least developed countries (ldcs) as designated by the united nations.


### the national law in that third country or territory implements the main provisions of the union electricity market legislation , including on the development of renewable energy sources and the coupling of electricity markets; ### the national law in that third country or territory implements the main provisions of the union electricity market legislation , including on energy efficiency policies , the development of renewable energy sources and the coupling of electricity markets;


### the third country or territory has submitted a roadmap to the commission , containing a timetable for the adoption of measures to implement the conditions set out in points (d) and (e); ### the third country or territory has submitted a roadmap to the commission , containing a timetable with the specific milestones for the adoption of measures to implement the conditions set out in points (d) , d (a) , d(b) and (e);


### the third country or territory has put in place an effective systems to prevent indirect import of electricity in the union from other third countries not meeting the requirements set out in points (a) to (e). ### the third country or territory has put in place and applies robust and effective systems to prevent indirect import of electricity in the union from other third countries not meeting the requirements set out in points (a) to (e).


### if the third country or territory has taken steps contrary to its decarbonisation objectives , such as providing public support for the establishment of new generation capacity that emits more than 550 g of co2 of fossil fuel origin per kwh of electricity. ### if the third country or territory has taken steps contrary to its decarbonisation objectives , such as providing direct and indirect public support for generation capacity of fossil fuel origin;


### (3) ‘emissions’ mean the release of greenhouse gases into the atmosphere from the production of goods; ### (3) ‘emissions’ mean the release of greenhouse gases into the atmosphere from the production of goods and from the energy consumed for the production of these goods;


### (22) ‘actual emissions’ mean the emissions calculated based on primary data from the production processes of goods; ### (22) ‘actual emissions’ mean the emissions calculated based on primary data from the production processes of goods and from the production of energy consumed during the production processes of goods;


### the total number of cbam certificates corresponding to the total embedded emissions , to be surrendered , after the reduction due on the account of the carbon price paid in a country of origin in accordance with article 9 and the adjustment necessary of the extent to which eu ets allowances are allocated free of charge in accordance with article 31. ### the total number of cbam certificates corresponding to the total embedded emissions , to be surrendered , after the reduction due on the account of the carbon price paid in a country of origin in accordance with article 9.


### for those calendar weeks in which there are no auctions scheduled on the common auction platform , the price of cbam certificates shall be the average price of the closing prices of eu ets allowances of the last week in which auctions on the common auction platform took place. ### for those calendar weeks in which there are no auctions scheduled on the common auction platform , the price of direct emissions shall be the average price of the closing prices of eu ets allowances of the last week in which auctions on the common auction platform took place.


### 1. considers that the eu industrial strategy must be implemented in a coherent and coordinated way; stresses that free trade and open markets which respect international law , as well as working with cooperative partners , will reinforce the eu’s industrial base; ### 1. considers that the eu industrial strategy must be implemented in a coherent and coordinated way; stresses that free , fair and sustainable trade , that properly balance the need for open markets and strategic sovereignty , in line with the european green deal , which respect international law , as well as working to develop strategic solidarity with like-minded partners on topics such as inter alia international standard-setting , will reinforce the eu’s industrial base;


### 1. recalls that the new industrial strategy was updated to reflect the lessons learned from covid-19 , and that this strategy will be key to enhancing eu competitiveness and overcoming future challenges; recalls that a strong governance system and market surveillance are essential in order to relaunch the single market; calls on the commission to focus on ensuring that the industrial strategy helps remove single market barriers and avoid further fragmentation; ### 1. recalls that the new industrial strategy was updated to reflect the lessons learned from covid-19 , and that this strategy will be key in delivering the green and digital transitions while enhancing eu competitiveness and overcoming future challenges; recalls that a strong governance system and market surveillance are essential in order to relaunch the single market; calls on the commission to focus on ensuring that the industrial strategy helps remove unjustified single market barriers and avoid further fragmentation; while at the same time taking into account the need to strengthen consumer protection;


### 1. welcomes the transition pathway for tourism and calls on the commission to establish an online stakeholders’ collaboration platform to further implement the co-creation process; ### 1. notes the transition pathway for tourism but is deeply concerned that due to the voluntary status of the pathway that its potential effect on the tourism sector is substantially limited; calls on the commission to follow up on the transition pathway for tourism and present a set of binding and concrete actions and interim targets , including in the area of r&i , infrastructure , technology development and skills to ultimately allow the sector to reach the goal of climate neutrality as well as supporting the development of sustainable and soft tourism throughout european destinations for both tourists and local populations whilst ensuring consistency and synergy among eu policies and objectives , funding and regulatory instruments that support industries through their sustainable transitions; calls for annual monitoring and reporting on the progress of the tourism sectors’ transition pathways towards reaching the eu’s climate and environmental targets , the competitiveness and resilience of the tourism sector; stresses that civil society , consumer organisations and trade unions should be part of developing ground rules and agreeing of priorities for the transition pathway for tourism.


### 1. welcomes the update of the industrial strategy; stresses that for the green deal to be a true growth strategy , reduce dependencies and maintain a level playing field for european industry during the transition , it needs to be accompanied by ambitious industrial policy; ### 1. notes the update of the industrial strategy; stresses that to be a true transformational strategy the european green deal and digital transition need to be at its core thereby reducing the eu’s dependencies and ensuring a level playing field for european industry while going through the transition , and creating the base for becoming a competitive front-runner in establishing a net-zero ghg emission and sustainable economy;


### a. whereas it is crucial to enable industry to implement the energy and digital transitions while preserving jobs , competitiveness and its ability to develop and produce clean products; ### a. whereas the unprecedented military aggression against ukraine by the russian federation has demonstrated again the urgent need to end the eu’s dependence on fossil fuels not only from a climate but also from a geo-political strategic perspective; whereas in this context the eu’s cooperation with like-minded international partners becomes more important in the fight against climate change and therewith linked phase out of fossil fuels in particular also in the industrial context; whereas accelerating the energy transition is a matter of energy security , economic security , and climate and environmental security; whereas it is crucial that industries are enabled to realise the ecological and sustainable digital transition while increasing jobs , competitiveness and its capacity to develop and produce highly sustainable and socially fair products , services and production processes;


### b. whereas in a changing geopolitical world , reducing eu dependencies on critical materials , products and technologies is vital; ### b. whereas in a changing geopolitical world and the persistent risks of climate change makes it imperative to reduce eu dependencies on fossil fuels , nuclear , critical raw materials , products , technologies , manufacturing capabilities and skills while fostering sustainable trade , strengthening of resilient and diversified global supply chains as well as maintaining high environmental and social standards; whereas regaining a high level of independence requires a collective european effort based on joint commitments and solidarity and the putting in place of enabling conditions for strategic sectors that are key for the ecological and digital transition , such as the renewable or semiconductor industry;


### 2. considers it regrettable that the eu multiannual financial framework and nextgenerationeu did not provide any specific funding for the tourism industry; ### 2. considers it regrettable that the eu multiannual financial framework and nextgenerationeu did not provide any specific funding for the tourism industry , nor a dedicated budget for sustainable tourism.


### 2. underlines that the eu cannot be dependent on non-eu countries for products and technologies that are essential to our economy and for our society of the future; stresses that the eu needs to regain a strong position in crucial global value chains and secure the supply of critical materials in times of crisis; ### 2. underlines that the eu should pay special attention to products and technologies that are essential for the ecological and digital transition of our economy and society; observes that labour shortages and supply chain constraints already visible during covid have been in part exacerbated by the invasion of ukraine by russia and related sanctions isolating russia from global markets; stresses that the eu needs to adopt a more strategic approach towards circular economy and diversification of third country suppliers to ensure a sufficient and sustainable supply of inter alia (critical) raw materials , in particular in times of crisis;


### 3. calls on the commission to support smes and micro-businesses (including artisans) in the tourism sector , by fostering innovative initiatives , simplifying bureaucracy and encouraging education and training (mainly on new digital skills) , to stimulate new tourism offerings in terms of destinations and experiences; ### 3. calls on the commission to support smes and micro-businesses (including artisans) in the tourism sector , by fostering innovative initiatives , simplifying bureaucracy and encouraging education and training (mainly on new digital skills and sustainable business models and transformation) , to stimulate new sustainable tourism offerings and experiences;


### 3. calls on the commission to present clear transition pathways for the industrial ecosystem as soon as possible , including by identifying the needs for a successful transition in terms of infrastructure , technologies and skills; calls on the commission to ensure consistency and coordination across all initiatives , objectives , funding and regulatory instruments that will support industry through the transitions; calls for annual monitoring and reporting on the competitiveness and resilience of our industrial ecosystems and on the progress made on the transition pathways , so that instruments can be adapted swiftly when needed; ### 3. calls on the commission to present , based on input of the european climate change council , as soon as possible clear science-based transition pathways per industrial ecosystem in consistency with the eu 2030 and 2050 energy and climate targets , in order identify from a ‘backcasting’ perspective concrete actions and interim targets , including in the area of r&i , infrastructure , technologies and skills to ultimately reach the goal of climate neutrality and amore circular economy as well as to ensure consistency and synergies across all eu policies and objectives , funding and regulatory instruments that support industries through their twin transition; calls for annual monitoring and reporting on the progress of individual sectors’ transition pathways , and their consistency with the eu’s 2030 and 2050 targets , the competitiveness and resilience of our industrial ecosystems , so instruments can be adapted swiftly when needed; stresses that civil society , the academic community , consumer organisations and trade unions should be part of the development , drafting and monitoring the transition pathways; asks the european scientific advisory board on climate change established under article 10a of regulation (ec) no 401/2009) to provide advise to the commission on the application of related eu policies , including priority infrastructure , projects and targets , and to suggest corrective measures in an scientific , evidence-based and transparent manner should emissions from an industrial sector deviate from the established specific pathway;


### 5. calls on the commission to facilitate multimodal journey planning and ticketing through digital services while better regulating the activity of online booking platforms and booking platform intermediaries; calls for the eu framework for short-term rentals to be strengthened and for new policies to be implemented with a view to enhancing transparency; ### 5. calls on the commission to bring forward a legislative proposal for multimodal journey planning and ticketing through digital services as soon as possible while better regulating the activity of online booking platforms and booking platform intermediaries; calls for the eu framework for short-term rentals to be strengthened and for new policies to be implemented with a view to enhancing transparency;


### 6. believes that the blue economy is paramount to promote a sustainable tourism industry; emphasises , in this regard , that the commission should ensure a fair and non-discriminatory transposition of directive 2006/123/ec when related to state-owned maritime concessions for tourism purposes; notes that it is crucial to safeguard the ecosystems of rural and coastal areas in order to preserve and improve the wealth of biodiversity and ecotourism; calls on the commission and the member states to provide remote regions with comprehensive smart tourism strategies to address problems of limited transport or digital connectivity. ### 6. believes that the blue economy is paramount to promote a sustainable tourism industry; emphasises , in this regard , that the commission should ensure a fair and non-discriminatory transposition of directive 2006/123/ec when related to state-owned maritime concessions for tourism purposes; notes that it is crucial to safeguard all ecosystems in order to preserve and improve the wealth of biodiversity and ecotourism; calls on the commission and the member states to develop comprehensive smart tourism strategies in remote regions to address problems of limited transport or digital connectivity.


### 6. stresses the need to strengthen ‘made in eu’ and accelerate the adoption of industry 4.0 technologies , particularly by small and medium-sized enterprises (smes); calls on the commission to embed the ‘made in europe’ partnership strongly in the horizon europe programme; ### 6. stresses the need to strengthen ‘made in eu’ and accelerate the adoption of industry 4.0 technologies , particularly by small and medium-sized enterprises (smes); calls on the commission to embed the ‘made in europe’ partnership strongly in the horizon europe programme; in view of facilitating the uptake of r&i results in the local economy and across value-networks; emphasises yet that , ‘made in europe’ should not only stand for quality and innovation , but also for highly sustainable and socially fair industrial products , processes and services;


### c. whereas the eu is home to world leading research institutes , companies and skilled people and has the potential to be a world leader in industrial innovation; ### c. whereas the eu is home to world leading research institutes , companies and skilled people and has the potential to be a world leader in industrial innovation in alignment with the eu’s goal of climate neutrality by 2040 at the latest;


### 7. welcomes the commission’s announcement issuing guidance on public procurement; stresses that public procurement is an essential instrument for national and economic security and for supporting the uptake of and demand for clean products; calls , in this regard , on the commission to review public procurement and competition rules where needed; ### 7. welcomes the commission’s announcement issuing guidance on public procurement; stresses that public procurement is an essential instrument for national and economic security and for supporting the uptake of and demand for sustainable and circular products , services and innovations; calls in this regard on the commission to review public procurement and competition rules where needed; in particular calls on the commission to make environmental , social and ethics criteria mandatory under public procurement legislative framework , in full alignment with the european green deal , and ensure that smes have a fair chance to participate in the substantial market for public procurement;


### 8. highlights the importance of including education , upskilling and reskilling in the transition pathways; calls on the commission to develop a strategy for vocational education and business-education partnerships within regional industrial clusters to boost skills and enhance the uptake of ready-for-market innovations by smes; ### 8. given the changed geopolitical and energy security context , emphasises the need to train and use all available qualified workforce to support the quick deployment of energy efficiency , renewable and storage technologies and the circular economy sector; stresses on the other hand the need for supporting workers in the fossil fuel and emission-intensive sectors faced with loss of jobs as a consequence of the closing of polluting plants through active labour market policies; points to the importance of providing educational curricula , professional (re-)training and (re-)skilling through programmes to equip individuals with the required skills leading to professional diversification; to this end asks the commission to develop together with member states a plan to address labour and skills shortages and speed up the re- and up-skilling of workers and the unemployed; highlights the importance of including education , upskilling and reskilling in the transition pathways; stresses that the promotion of gender equality , gender mainstreaming , equal opportunities and women’s labour market participation and entrepreneurship should be ensured throughout; calls on the commission to develop a strategy for vocational education and business-education partnerships within regional industrial clusters to boost skills and enhance the uptake of ready-for-market innovations by smes and start-ups;


### 9. underlines that smes and start-ups are playing a central role in the digitalisation of the eu and are a critical source of innovation; stresses the need to improve their access to financing; ### 9. underlines that smes and start-ups are playing a central role in the digitalisation of the eu and the launch of innovative sustainable business models and products; emphasises their importance as a critical source of innovation; stresses the need to improve their access to financing , including national and eu funding;


### 10. stresses the need for regulatory stability and predictability; calls on the commission to include roadmaps in the transition pathways to reduce administrative burdens for european businesses , especially smes , by at least 30 %; stresses the ‘one in , one out’ principle; ### 10. stresses the need for ensuring future-oriented eu regulatory framework in the industrial context taking into consideration economic , environmental , gender and social impacts in an integrated and balanced way as well as the costs of non-harmonisation at eu level; urges to identify legislation that runs counter the european green deal and wider sustainable development goal objectives; highlights the need to decrease administrative burden , especially for smes and start-ups , however without detriment to the setting and enforcement of the highest standards for consumer , workers , health and environmental protection;


### 11. underlines the regional dimension of industrial policy and the role of regional smart specialisation strategies; calls on the commission to include instruments to increase the use of ‘made in eu’ at a regional level; ### 11. underlines the regional dimension of industrial policy and the need to address the social and economic inequalities beyond reskilling and jobs in new economic sectors; stresses that to guarantee a more inclusive transition , it is required to include the participation of all local stakeholders , including civil society and community representatives in the preparation and implementation of regional transition plans;