EU Discusses Temporary and Retroactive Exemptions from CBAM for Certain Goods

Tashkent, Uzbekistan (UzDaily.com) — The European Union is currently considering the introduction of a mechanism for temporarily—and even retroactively—excluding certain goods from the Carbon Border Adjustment Mechanism (CBAM).

In early January, the European Commission published clarifications on the draft of the new Article 27a of the CBAM Regulation. While these provisions are not yet in force, their active discussion within EU institutions has already drawn heightened attention from exporters and could significantly impact the supply of products to the European market.

CBAM is an EU instrument designed to level the playing field between European and foreign producers by charging for the carbon footprint of imported goods. The mechanism applies to a range of energy- and carbon-intensive products, including ferrous metals and steel products, aluminum, fertilizers, cement, and electricity.

For exporters from Uzbekistan, this means stricter carbon reporting requirements during the transition period and, from 2027 onwards, direct financial obligations related to the purchase of CBAM certificates.

The draft Article 27a introduces a so-called “emergency brake,” granting the European Commission the authority to temporarily exempt certain goods from CBAM. This step would be possible if applying the mechanism leads to a sharp price increase or causes serious and unforeseen harm to the EU internal market.

A fundamentally new element is the potential for retroactive application of such decisions. In other words, the exemption could take effect not from the date of the official decision, but retroactively—dating back to the moment when, according to the EU, critical market conditions arose. This raises questions about potential reimbursements for CBAM certificates already purchased by importers.

The relevance of discussions around Article 27a is growing as the CBAM transition period draws to a close. 2026 will be the final year in which companies are only required to report emissions. Starting in 2027, the mechanism will be fully operational, requiring importers in the EU not only to declare but also to pay for the carbon footprint of imported products.

In this context, the ongoing debate on potential adjustments during the system’s launch highlights regulatory uncertainty.

For Uzbek exporters, this represents an additional risk factor. Contracts, pricing terms, and carbon accounting may need revision depending on how the new provisions are ultimately formulated and applied.

The sectors attracting the greatest attention under CBAM and the proposed Article 27a include mineral fertilizers and ammonia production, the aluminum industry, ferrous metallurgy, and other energy-intensive chemical products.

Experts recommend that companies closely monitor EU decisions and discussions regarding Article 27a, include flexible CBAM clauses in export contracts, ensure accurate and transparent emissions accounting, and prepare for possible regulatory changes, including potential refunds of previously paid amounts.

Overall, CBAM remains a critical factor for market access to the EU for third-country suppliers. However, the discussion surrounding Article 27a demonstrates that even within the EU there is awareness of risks associated with sharp price increases and recognition of the possibility of temporary and retroactive regulatory adjustments.

For Uzbek exporters, the key takeaway is the need not only to comply formally with CBAM requirements but also to continuously monitor regulatory developments to minimize excessive costs and maintain competitiveness in the European market.