EU CBAM: Commission plans carbon-leakage relief for exporters by end-2025
The EU Commission announced on 3 July 2025 that it will propose a scheme by end-2025 to mitigate carbon-leakage risk for producers of goods at risk of such leakage, ensuring equal treatment whether goods are produced and sold in the EU, imported, or exported. The scheme will operate for a defined initial period before review following the 2026 ETS reform. This complements the existing Carbon Border Adjustment Mechanism (CBAM) and reflects the Commission's broader effort to prevent carbon-intensive production from shifting to countries with weaker climate policies.
Photo: Frank Rietsch / PexelsEU to propose carbon-leakage relief scheme under CBAM framework
The European Commission announced on 3 July 2025 that it will put forward a proposal by the end of 2025 to mitigate carbon-leakage risk for producers of goods vulnerable to such leakage under the Carbon Border Adjustment Mechanism (CBAM) regime.
According to the Commission announcement, the scheme "aims to support producers of goods at risk of such carbon leakage and ensure equal treatment for all goods, whether produced and sold in the EU, imported into the EU or exported." The measure is designed to address the competitive disadvantage faced by EU exporters of carbon-intensive goods when competing against producers in jurisdictions with less stringent climate policies.
Scope and timeline
The relief scheme will operate "for an initially defined period and then will be reviewed after the new 2026 ETS reform is approved." This two-stage approach—initial deployment followed by post-2026 review—indicates the Commission views this as an interim support mechanism pending broader reform of the EU Emissions Trading System (ETS).
The Commission framed the proposal as "a crucial step in promoting a sustainable and low-carbon economy" and part of its wider effort to "prevent carbon-intensive production from being shifted to countries with less stringent climate policies."
Context: CBAM and the Clean Industrial Deal
This announcement sits within the Commission's "Clean Industrial Deal" and references the EU's Climate Law target to reach 2040 with a net-zero economy. CBAM, which entered its transitional phase on 1 October 2023 and is scheduled for mandatory compliance from 1 January 2026, already imposes carbon-pricing obligations on imports of cement, steel, aluminium, fertilisers, electricity, and hydrogen. The proposed carbon-leakage scheme appears designed to complement CBAM by protecting EU-based producers who face higher operational costs due to EU carbon regulation.
What this means for shippers
Exporters of carbon-intensive goods (cement, steel, aluminium, fertilisers, hydrogen, electricity) from the EU must monitor the end-2025 proposal closely. Once finalised, the relief scheme may alter landed-cost calculations, tariff treatment, or compliance obligations for these chapters. Begin mapping your product HS classification and carbon intensity now; the scheme's design—whether it reduces CBAM certificate costs, grants subsidies, or modifies duty treatment—will determine your pricing and compliance strategy. Check your CBAM certificate exposure and update your cost models when the proposal is published.
