Hydrogen Council Calls for Removal of CBAM Article 27a to Restore Investment Certainty

The Hydrogen Council, alongside Business for CBAM Coalition, European Industrial Gases Association, Hydrogen Europe, IFIEC Europe, and Renewable Hydrogen Coalition, has formally called for the removal of proposed Article 27a from the Carbon Border Adjustment Mechanism (CBAM) revision.

In a letter to the European Parliament's Committee on Environment, the coalition argues that Article 27a introduces uncertainty that undermines market confidence and discourages critical investment in decarbonization across CBAM-covered sectors.

The groups identify three primary concerns:

Policy Impact: Article 27a creates open-ended uncertainty that disrupts fertilizer markets and delays contract formation, contradicting CBAM's original purpose of providing long-term investment certainty.

Investment Challenges: The unclear future CBAM exposure makes it impossible to price assets with 15-30 year lifetimes, reducing Europe's attractiveness for renewable and low-carbon ammonia and fertilizer investments.

Strategic Risks: Continued uncertainty threatens food security given EU dependence on Russian nitrogen fertilizer imports (~30%), increases exposure to fossil fuel price volatility, and halts investment in clean supply diversification.

The coalition emphasizes that CBAM was designed to support climate ambition and competitiveness. Article 27a risks undermining these goals by creating disincentives for carbon pricing globally and disadvantaging first movers in clean hydrogen and ammonia production.

Originally reported by Hydrogen Council. Read the full article →