AEGIS Europe Responds to ENVI Vote on the Temporary Decarbonisation Fund in the context of European Commission 17 Dec. package on CBAM
Brussels, 15 July 2026. The European Parliament's Committee on the Environment, Climate and Food Safety (ENVI) has taken an important step in shaping the future of the EU's Carbon Border Adjustment Mechanism (CBAM), adopting its position on 6 July. The committee endorsed the extension of CBAM, strengthened measures to prevent circumvention, and proposed changes to the mechanism for addressing market disruptions. In parallel, ENVI also adopted its position on the temporary decarbonisation fund (TDF).
However, AEGIS Europe wishes to express the following concerns regarding the compromise amendments adopted by the ENVI Committee on the Temporary Decarbonisation Fund:
The TDF cannot substitute a long-term structural solution for EU export sectors impacted by CBAM. Dedicated financial support should therefore be earmarked within the forthcoming EU Multiannual Financial Framework, providing long‑term certainty for EU producers, in case such a solution is eventually retained.
This long-term solution needs to be proposed urgently and compensate EU exporters for the increased ETS costs. CBAM will generate raw material cost increases for importers of CBAM covered goods and downstream operators. Such costs should also be acknowledged and compensated. Therefore, we welcome the extension of eligibility to downstream operators and certain downstream goods under the TDF. Export adjustments must be part of the CBAM design to ensure that European exports do not become uncompetitive on foreign markets. This long-term solution should reflect the free allocation phase out trajectory, maintain decarbonization incentives, and be explicitly linked to export exposure. It should be included in the ETS review proposal which is expected mid-2026. AEGIS Europe proposed a WTO-compatible solution.
A carbon leakage tool, not an investment tool: the TDF, and hence the permanent export adjustment solution, are carbon leakage tools designed to protect EU-based, energy-intensive industries, rather than an investment fund, whether for EU installations or developing countries. In addition, European producers are already subject to a series of decarbonisation conditionalities. Any provision related to adding decarbonisation conditionalities for European producers should be rejected.
It should be emphasized that China's strategy in Africa and South-East Asia is heavily driven by its need to export domestic industrial overcapacity, flooding markets with subsidized manufactured goods. Top Chinese investment and contracting destinations include Nigeria, South Africa, Algeria, Morocco, Angola, the Democratic Republic of the Congo (DRC), Egypt, Indonesia, Malaysia and Vietnam. The overcapacities/productions of those countries are directed towards Europe, affecting massively the competitiveness of European producers. Any provision related to funding countries in development or creating a tool for "international climate finance" through the TDF, should not be considered in the TDF which is a carbon leakage instrument. There are other tools and instruments for this.
Ahead of the Parliament's plenary vote and the forthcoming negotiations, AEGIS Europe will continue to engage with the European institutions to ensure that the final legislation provides effective protection against carbon leakage while safeguarding the competitiveness of European industry.
AEGIS Europe’s key messages on CBAM
•AEGIS Europe supports a CBAM that is efficient in addressing carbon leakage risks while ensuring a level playing field on both European and foreign markets
• Simplification attempts are welcome, but not at the expense of effectiveness in preventing carbon leakage. Simplification should not facilitate or lead to circumvention
• CBAM needs a WTO-compatible export adjustment solution for producers of CBAM goods to avoid carbon leakage and the replacement of EU low-carbon products with high-carbon alternatives on global markets
• Anti-circumvention rules must be strengthened to ensure the effectiveness of the measure and avoid practices such as resource shuffling or cost absorption
CBAM alone cannot solve the carbon leakage issue for all sectors, especially ETS sectors it covers with very specific value chains, products, and global trade flows. For these sectors, a stronger carbon leakage protection and additional measures are needed
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AEGIS Europe is an industry alliance that brings together more than 30 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.
AEGIS Europe Letter to President von der Leyen on Trade Defence
Dear President von der Leyen,
Dear Executive Vice-Presidents of the Commission
Dear Members of the College of Commissioners,
AEGIS Europe is an industry alliance that represents more than 30 European manufacturing associations and companies across entire industrial value chains, from metals and ceramics to transportation industries. Together, our members account for more than €500 billion in annual turnover and millions of direct and indirect jobs across the European Union. European manufacturing is under extreme pressure from state-controlled and export-driven economies, which subsidise enterprises, resulting in global overcapacities flooding world markets. While striving to maintain a competitive edge, European industries in many sectors can no longer endure unfair trade practices resulting from such overseas overcapacities.
As highlighted in the Draghi Report, Europe urgently needs a stronger industrial and trade strategy capable of preserving a competitive manufacturing base and ensuring a level playing field internationally. AEGIS Europe supports the EU’s existing Trade Defence Instruments, which remain essential but must be strengthened. European industries continue to face investigations that are too slow, measures that are too weak, and instruments that are insufficiently adapted to the scale and speed of distortions that evolve, and strategies to avoid EU measures.
AEGIS Europe calls, therefore, for faster and more effective trade defence procedures, as well as the urgent allocation of additional human resources in the trade defence services of DG Trade in order to enhance the speed, effectiveness, and enforcement capacity of investigations. At the same time, AEGIS Europe calls for the urgent establishment of a new EU instrument specifically designed to address overcapacities and their disruptive consequences for European industries and value chains.
This instrument should:
be available on demand to any industrial sector affected by loss of market share in the EU and export markets due to overcapacities and other trade distortions;
give competence to the Commission to act;
allow for a full value-chain approach, hence addressing the impact of unfair practices throughout industrial ecosystems and in anticipation of circumvention or shifts in production;
as overcapacities and distortions are not limited to one country alone, the instrument must be available for all countries;
rely on publicly available information and/or market intelligence analyses provided by the industry to trigger investigations
require respondent countries to demonstrate the absence of overcapacities.
The European Union cannot remain exposed to unfair competition while other global actors continue to deploy increasingly assertive industrial and trade policies. A stronger, more responsive, and more effective EU trade defence toolbox is essential to safeguarding European industry.
Sincerely, Inès Van Lierde Renaud Batier Co-Chairs AEGIS Europe
AEGIS Europe Feedback on the Revision of the Public Procurement Directives
AEGIS Europe welcomes the opportunity to provide its input to the revision of the Public Procurement Directives.
We are an industry alliance bringing together more than 30 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products.
Public procurement is a strategic tool that can be used to strengthen Europe’s industrial base, competitiveness, and strategic autonomy. Its revision should ensure strong enforcement and alignment with EU industrial, trade, and climate policies to prevent price-driven practices that allow unfairly subsidised or non-market products to undercut European production. If effectively structured, public procurement can incentivise high environmental and social standards and contribute to strategic autonomy.
Below, you may find some of our suggestions, based on our members’ input:
• Exception on international rules: Article 20, Directive 2014/25/EU allows the derogation of EU public procurement rules ‘pursuant to international rules’ (e.g. through an international agreement). This has created a route for the undisputable circumvention of EU public procurement rules and unfair competition, especially through China’s Belt and Road Initiative projects in certain Member States (e.g. Hungary). AEGIS Europe calls for the removal of Article 20, which threatens the general interest of European Union. The uniform application of EU procurement rules across all contracting entities will then be ensured, and vital EU public interest objectives such as transparency and non-discrimination will be upheld.
• Systematic exclusion of Foreign Bidders in strategic sectors. Clear and more uniform rules for the participation of Foreign Bidders – understood as bidders from countries which are not a party to the WTO Agreement on Government Procurement (GPA) or other trade agreements with the EU, i.e. in line with EU international obligations – must be ensured to provide legal certainty to bidders and contracting entities alike. As the EU has exclusive competence on this matter, we call on the systematic exclusion of these bidders for public procurement procedures related to strategic sectors, especially for State-owned economic operators since they are of direct concern for the security of the Union.
• A long-term vision for European content: In the longer term, EU content must become the cornerstone of a credible public procurement policy. Public procurement should aim for a high share of European-based production, with limited exemptions where products are unavailable.
• Definition and enforcement of “Made in Europe”. The concept of “Made in Europe” is central to the effectiveness of EU preference in public procurement, yet it currently lacks a clear and robust definition. Experience from trade and climate policies show that origin-based criteria can be easily circumvented if they rely on formalistic or minimal transformation rules. Public procurement should therefore rely on substantive production criteria rather than formal origin labels.
• Strategic alignment with the Foreign Subsidies Regulation (FSR): The current Regulation allows a suspicious bidder already targeted by an in-depth investigation of the European Commission that has not yet been completed to bid on – and potentially be awarded – new projects. Given the systemic risks this represents for the procurement market, no such bidder should be allowed to participate in procurement procedures, be it alone or part of a consortium, unless they cooperate and facilitate the completion of an ex officio investigation. Additionally, public procurement should also consider the presence of industrial subsidies and structural overcapacities in the country of origin. In non-market economies, such factors often result in systematically underpriced products that cannot be matched by EU producers operating under normal market conditions.
• Very low bids and distortion of competition: Public procurement rules already provide contracting authorities with the possibility to exclude tenders where there is a distortion of competition, including in cases linked to dumping practices (abnormally low tenders). However, this possibility is rarely used in practice, and very low bids are often treated as a purely commercial issue. This approach ignores the reality that many such bids are the result of non market practices, including state subsidies, environmental dumping or structural overcapacities. The provisions on abnormally low tenders should therefore be reinforced, in full alignment with the FSR rules.
AEGIS Europe reacts to the European Parliament endorsement of the European Commission proposal for simplifying the CBAM
Brussels, 23 May 2025. Yesterday, the European Parliament endorsed the European Commission’s proposal to simplify the Carbon Border Adjustment Mechanism (CBAM). The text was adopted with 564 votes in favour, 20 against, and 12 abstentions, reflecting broad political consensus. MEPs introduced only technical amendments for clarification and supported the inclusion of a new de minimis mass threshold of 50 tonnes.
We welcome the remarks made by MEP Antonio Decaro, Chair of the ENVI Committee and rapporteur, following the vote:
“The CBAM is a crucial instrument to help the EU prevent carbon leakage and incentivise climate action outside the EU. (...) This approach enables us to simplify matters for companies without dismantling or weakening the CBAM. We will continue to work quickly to bring legal clarity and certainty to all CBAM stakeholders.”
While we support this progress, we urge legislators to consider some key recommendations to ensure that the CBAM remains both effective and industry-friendly:
AEGIS Europe has been advocating for the adoption of an export adjustment for several years: CBAM needs a WTO-compatible export solution for CBAM sectors to avoid carbon leakage and the replacement of EU low-carbon products with high-carbon alternatives on global markets, in a context where European producers already face several challenges in the export market, including high production costs (especially energy costs), global overcapacities, and aggressive industrial and trade policies by third country competitors.
Furthermore, anti-circumvention rules must be strengthened to ensure the effectiveness of the measure and avoid practices such as resource shuffling which allows the exporting to the EU only products with lower carbon footprint while deviating other products to other markets, or cost absorption, where producers could absorb partially or totally the cost of the CBAM by reducing the price of the products at the EU border and/or by spreading the levy across his entire production. The risk of circumvention must be monitored at customs level, and the authorisation process for CBAM declarants should ensure that they are sufficiently skilled to detect this. Effective enforcement of the new exemption threshold for small importers at 50 tonnes of CBAM goods per year as introduced by the Omnibus package is necessary to prevent circumvention, as economic operators could try and avoid CBAM obligations by artificially importing through multiple entities falling below the threshold. Moreover, while AEGIS sees the benefits of simplifying CBAM for importers, it draws the legislator’s - attention to the need to reciprocally simplify the EU ETS for small emitters on the EU manufacturing side.
AEGIS Europe supports a CBAM that is efficient in addressing carbon leakage risks while ensuring a level playing field on both European and foreign. To achieve these goals, we believe it is imperative to assess CBAM effectiveness before any extension of its scope: this assessment should have as a departing point a consultation of the industry. To do so, it is important to define the assessment criteria which will be used and to conduct a prior thorough impact assessment by consulting the industries concerned. Moreover, for some ETS sectors with very specific value chains, products, and global trade flows, a CBAM cannot effectively address carbon leakage and reduce emissions. For these sectors a stronger carbon leakage protection is needed.
In conclusion, AEGIS Europe members agree on the ultimate importance of finding a balance between simplification, accuracy and effectiveness of the mechanism in preventing carbon leakage. Moreover, simplification should not facilitate or lead to circumvention, and any effort in this sense should be subject to a comprehensive evaluation. A thorough consultation of the industry, including both CBAM sectors and sectors which might be covered by CBAM, should be conducted, keeping in mind that CBAM alone cannot solve the carbon leakage issue for all sectors, and further measures are needed to achieve decarbonisation.
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AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.