European Parliament approves temporary decarbonization fund for export industries

On Tuesday, the European Parliament plenary voted to approve a proposal for the establishment of a Temporary Decarbonization Fund. The measure passed with 433 votes in favor, 97 against, and 146 abstentions, aiming to support European industries that face a risk of carbon leakage while exporting to third-party countries.

The fund will provide financial assistance during 2027, 2028, and 2029, using the period of 2026–2027 as a reference for export production volume. Eligibility for the support is contingent upon evidence of actual greenhouse gas emission reductions. The proposal stipulates that funding should be proportional to these efforts, ensuring that European industrial competitiveness is maintained alongside environmental goals.

The initiative is designed to be financed by a portion of revenues generated from the sale of certificates under the Carbon Border Adjustment Mechanism (CBAM). Specifically, the proposal suggests that, within the scope of the next Multiannual Financial Framework covering 2028–2034, approximately 75% of these CBAM revenues could be allocated to support the fund’s objectives.