The European Commission has projected approximately €10.8 billion in revenue from the Carbon Border Adjustment Mechanism (CBAM) between 2028 and 2034, placing carbon border charges within the EU’s proposed long-term budget financing framework.
Under the Commission’s proposed 2028–2034 financial framework, CBAM receipts would form part of a new own-resources package intended to reduce pressure on contributions from member states. The projected revenue equates to an average of approximately €1.5 billion annually over the seven-year period.
The financing arrangements remain subject to political negotiations among EU governments, which disagree over the overall budget size and the allocation of funding between established spending commitments, industrial competitiveness and newer financial priorities.
CBAM joins wider EU revenue proposals
The Commission’s proposed own-resources package also includes revenue from the EU Emissions Trading System (EU ETS), electronic waste, tobacco excise duties and a proposed corporate contribution.
The negotiations will determine how these revenue sources contribute to the bloc’s long-term financing and how competing budget priorities are balanced.
For industrial companies, the allocation of carbon-related receipts is relevant to investment planning as European steel, aluminium and cement producers face growing requirements to finance decarbonisation while free emissions allowances are progressively reduced.
CBAM imposes carbon-related obligations on importers of covered products, while the proposed budget framework would incorporate the resulting revenues into the EU’s wider financing arrangements.
Industrial decarbonisation competes with other funding priorities
The distribution of carbon-related revenues could affect the resources available for clean industrial technologies, energy efficiency and measures addressing international cost disadvantages.
Industry representatives are likely to favour directing a greater share of these receipts towards industrial transformation as European producers invest in lower-emission production processes.
However, the EU budget also needs to accommodate infrastructure, research, defence and regional development. The negotiations will determine how these priorities are balanced against potential support for energy-intensive industries.
International climate finance remains part of the debate
The proposed use of CBAM revenues also has implications for relations with developing countries. These countries have argued that carbon-related import charges create additional costs for exporters that may have limited access to financing for industrial decarbonisation.
The allocation of part of the revenue towards international climate support could therefore influence diplomatic discussions surrounding the mechanism.
For investors, the issue extends beyond the amount collected through CBAM to the eventual distribution of those funds. The EU’s budget negotiations will determine the role carbon border receipts play in financing industrial transformation alongside the bloc’s other spending commitments.
