The European Parliament adopted a resolution on a World Trade Organization (WTO)-compatible carbon border adjustment mechanism (CBAM) with 444 votes in favor, 70 against and 181 abstentions.
The resolution underlines that the increased ambition of the European Union (EU) to fight climate change must not lead to "carbon leakage," referring to EU production being moved to non-EU countries with looser regulations.
MEPs held that the CBAM, to be put in place by 2023, would create a global level playing field as well as an incentive for both EU and non-EU industries to decarbonize in line with the Paris Agreement objectives.
The lawmakers stressed that the mechanism should be WTO-compatible and not be misused as a tool to enhance protectionism.
Revenues generated through the system should be used as part of a basket of the bloc's own revenues to boost support for a green recovery, they added.
The European lawmakers, however, voted against the gradual phase-out of European industries' free carbon allowances they currently receive in the European carbon market and under the "Carbon Leakage" rules.
