A group of European and international industrial organisations has formally urged EU authorities to remove Article 27a from the proposed reform of the Carbon Border Adjustment Mechanism (CBAM), arguing that it introduces regulatory uncertainty and weakens the credibility of the bloc’s carbon pricing system.
CBAM is the instrument through which the EU seeks to apply a carbon cost to imported goods — including fertilisers, steel and cement — in order to align them with the environmental requirements faced by European producers. The mechanism is being closely watched in Latin America, as it could affect industrial and agri-industrial exports to the European market.
Industry concerns intensified following the European Commission’s proposal to introduce an “emergency brake” that would allow for the temporary suspension of CBAM’s application to certain products if its implementation is deemed to cause serious disruption to the EU internal market. According to signatories, the clause lacks clear criteria, defined time limits and objective parameters for activation.
Business representatives argue that regulatory predictability is essential for investments with time horizons of 15 to 30 years, particularly in projects related to clean hydrogen, low-carbon ammonia and sustainable fertilisers. The possibility of retroactive or discretionary suspensions, they warn, complicates risk assessment and could delay or redirect investment decisions.
The debate carries implications beyond Europe. Several Latin American countries are positioning themselves as potential suppliers of green hydrogen and renewable ammonia to the European market. A stable regulatory framework in the EU is widely regarded by investors as a critical signal for enabling clean energy export projects and decarbonised industrial production.
In the agri-food sector, signatories also argue that food security, competitiveness and the energy transition are not conflicting objectives. They contend that greater production of low-carbon fertilisers — both within Europe and through diversified imports — could reduce exposure to natural gas price volatility and geopolitical tensions that have affected markets in recent years.
According to industry representatives, trade and energy uncertainty have been key drivers of recent volatility in fertiliser markets, more so than the implementation of CBAM itself. Weakening the mechanism, they argue, could send a counterproductive signal at a time when several major economies are considering introducing their own carbon pricing systems.
Signatories maintain that CBAM’s original objective was to foster global decarbonisation and promote clear and consistent rules for international trade in the context of the energy transition. In their view, maintaining regulatory stability will be decisive in securing investment, strengthening low-carbon value chains and preserving the European Union’s climate credibility.
