The design of the CBAM factors into account the gradual phase out of free allowances or permits issued to EU emitting industries under the bloc’s EU ETS. These free allowances enable emitters to pay less for their emissions, and so phasing them out has encountered resistance. Six governments within the EU: Bulgaria, the Czech Republic, Greece, Poland, Romania and Slovakia have asked the Commission to instead freeze the number of free allowances at last year’s levels. They argue this is necessary to help emitters within the EU to cope with higher energy prices following the Iran war, according to Reuters. In May, the EU Commission proposed new rules on the number of free emissions allowances industries would receive until 2030. Brussels argued that the change would lower the carbon costs of industry by €4 billion by the end of the decade, but reducing the free allocations given out more slowly than initially planned.
