MEPs killed the CBAM safety valve: what importers lose when the next price shock hits

The European Parliament struck the CBAM safety valve from its negotiating position on September 15, 2026, confirming by 464 votes to 50, with 159 abstentions, the deletion its environment committee made in July. The clause, Article 27a of the Commission's December 2025 proposal COM(2025)989, would have allowed Brussels to temporarily exempt goods from certificate obligations during a supply or price shock. The vote itself, and the downstream expansion mandate it anchors, are covered in our report on the plenary's adoption of the CBAM downstream mandate. This piece covers the consequence: what importers of fertiliser and steel lose now that Parliament has voted against an off-switch.

The valve is not dead yet. The Council's general approach of June 12, 2026 kept the exemption mechanism and tightened its conditions, so the question goes to trilogues with the two co-legislators holding opposite answers. For importers, the difference is concrete: an exemption stops the certificate cost while a crisis runs, whereas Parliament's substitute keeps the cost in place and promises money back later.

What the safety valve would have done

The safety valve was Article 27a of COM(2025)989, a clause empowering the European Commission to temporarily exempt specific goods from CBAM when serious and unforeseen circumstances cause severe disruption, such as a supply squeeze or a price spike. Borderlex, which reported the plenary outcome on September 15, describes the mechanism as an option letting the Commission temporarily remove products from CBAM coverage when they face significant price fluctuations.

Fertiliser is the sector the clause was written around. Nitrogen fertiliser prices track natural gas prices, and the 2021 to 2022 gas crisis showed how fast a cost shock travels from the gas market through ammonia plants to farm inputs. With CBAM certificate costs layered onto imported urea and ammonium nitrate since January 1, 2026, a repeat spike would arrive with a regulatory surcharge attached and, under Parliament's position, no legal way to lift it. Farm lobbies understood this from the start: after the ENVI committee first deleted the clause in July, Copa-Cogeca called Article 27a the only provision that would have allowed temporary suspension of CBAM on fertilisers in a crisis, as we reported when Irish farmers demanded a CBAM suspension on nitrogen fertiliser.

What Parliament adopted instead

Parliament replaced exemption with compensation: certificate obligations continue through a shock, and CBAM revenue is redirected to the affected sectors, chiefly through the Temporary Decarbonisation Fund. The review text keeps a general provision under which the Commission may, in the Parliament position's own wording reported by Farm Europe, redirect CBAM revenues to affected sectors "as appropriate."

The concrete vehicle is a separate file. The Temporary Decarbonisation Fund, proposed as COM(2025)990, channels 25 percent of the CBAM revenue collected in 2028 and 2029 to EU producers, covering the 2026 and 2027 production period. Parliament's position brings the fund forward to run from 2027 to 2029, opens it to all downstream operators using CBAM goods as inputs, including fertiliser producers and users, and sends leftover money to international climate finance rather than back to member states. Insight EU Monitoring reported that MEPs adopted the fund position by 433 votes to 97, with 146 abstentions, in the same session.

Three gaps separate compensation from exemption for an importer caught in a shock:

• Cash flow: the certificate obligation accrues immediately, while fund support arrives through an application and payment cycle
• Coverage: the fund is sized by a fixed revenue share, not by the scale of the disruption it is meant to offset
• Beneficiary: support flows to EU producers and downstream operators, not to the importer who bought and surrendered the certificates

Farm Europe put the farmers' version of that gap plainly: "Where a policy structurally raises the price of an input that farmers cannot substitute and whose cost they cannot pass on, the revenue it generates should not bypass them."

The Council kept the valve, so trilogues decide

The exemption tool survives into trilogues because the Council's June 12 general approach retained it, with tighter boundaries on when and how long it can apply. According to Borderlex, EU governments insist that any product removal must follow "clear and objective criteria, including EU exposure to severe price increases." The Council press release of June 12 sets three further conditions: an exemption applies for at least one full calendar year to give authorized declarants certainty, a good cannot stay exempted for more than two years under the same circumstances, and the reduction of EU ETS free allocation is paused for EU installations producing the exempted goods, so that the exemption does not itself create carbon leakage.

The three institutional positions on the clause now diverge as follows.

Two of the three institutions want an off-switch in the regulation. Trilogue outcomes on contested clauses tend toward conditional versions rather than clean deletions, but Parliament enters the room with a fresh plenary mandate behind its position, and the negotiators must also settle the far larger fight over the product list, which runs from the Council's roughly 200 downstream products to Parliament's roughly 457, as mapped in the ENVI position that framed this plenary.

What fertiliser importers lose when prices spike

Fertiliser importers lose the only proposed mechanism that could have switched off certificate costs during a gas-driven price spike, and nothing Parliament adopted changes what they owe while one runs. A tonne of imported urea carries roughly 2.5 tCO₂e of embedded emissions, a full carbon cost of about €188 at the Q2 2026 certificate price of €75.28/tCO₂e. The 2026 CBAM factor of 2.5 percent keeps the certificate share under €5 per tonne today, but that share rises every year until free allocation ends in 2034, so each future shock hits a larger CBAM base than the last.

Copa-Cogeca's reaction to the plenary vote states the exposure directly: deleting the safeguard clause, the farm lobby said, "leaves farmers fully exposed to the additional costs generated by the mechanism, even in exceptional circumstances when fertiliser prices are already soaring." The Irish Farmers' Association had escalated from restoring the clause to demanding outright suspension in August, and the plenary result forecloses the first route inside Parliament's mandate. What remains for the sector is the favourable treatment already in the rules, a 1 percent default value markup against the 10 to 30 percent applied to other sectors, and eligibility for fund support under Parliament's TDF position. Non-EU producers weighing what the vote means for their EU sales can start from the CBAM impact on fertilizer exporters guide.

What steel importers lose, and what happens next

Steel importers lose the same insurance across a bigger exposure, because blast furnace steel carries roughly 2.0 tCO₂e per tonne and Parliament's mandate extends CBAM to more than 400 downstream CN codes from 2028. A supply shock in the steel market, whether from trade measures, sanctions, or an energy crisis, would find importers of rebar, wire, fasteners, and machinery parts all inside the mechanism with no exemption clause available. At the Q2 price, the full carbon cost on a tonne of BF-BOF steel is roughly €151, and importers can model their own tonnages against shock-scenario prices with the CBAM cost calculator.

The file now moves to trilogues, expected to begin in autumn 2026, where the fate of the safety valve sits alongside the product list, scrap treatment, and the fund's start date. Importers should plan on the conservative assumption: certificate obligations continue through any future disruption, and relief, if it comes, arrives as money after the fact rather than as an exemption during the event.