By Thomas Kolbe
(CONVERSEER) – As of January 1, imports into the EU are now subject to the comprehensive CO2 certification regime. Brussels is closing existing gaps in its protectionist extraction scheme. At the same time, the European Commission has established another autonomous revenue source.
For aficionados of the lean state and free markets, 2025 was already a disaster. And there is every reason to believe that further bitterness awaits in the coming months. The kickoff of the 2026 fiscal raid is now being led, once again, by Brussels.
Following the increase of the tonnage price under the EU Emissions Trading System (EU-ETS) from €55 to €65, the European Commission under Ursula von der Leyen has struck again. Since the start of the year, importers in the EU are subject to the so-called Carbon Border Adjustment Mechanism (CBAM). This mechanism effectively extends the European emissions trading system to foreign trade.
Emissions Trading at the Border
Importers are now obliged to identify emissions-intensive goods, analyse them in detail, and purchase corresponding certificates for every ton of CO2 emitted during production and transport. Officially, the EU aims to prevent so-called carbon leakages — the relocation of CO2-intensive production processes to countries with lower environmental standards.
What began as a kind of adjustment phase with Kafkaesque documentation requirements in October 2023 is now being dramatically expanded and monetized. CBAM now covers around 180 processed products containing steel or aluminum, including machinery, car parts, household appliances, agricultural equipment, and bridge components. The result: processes become more complex, and import chains more expensive.
Ultimately, as is often the case, the consumer bears the cost. The industrial mid-sized sector, tied to German or European locations, is hit particularly hard, losing competitiveness and operational freedom.
The new documentation requirements are reminiscent of the widely debated supply chain law. Companies are required to fully trace and document CO2 emissions across highly complex international supply chains. While CO2 prices already paid in the country of origin can be credited, significant gaps typically remain for imports from emerging and developing countries — especially in terms of documentation.
Sanctions, Facades, and the New Revenue Source
Brussels now leverages these informational weaknesses with financial sanctions. If false information is detected, importers face fines of up to €50 per unreported ton of emitted CO2.
Of course, Brussels also has a sophisticated media strategy to publicly promote the next element of its EU extraction mechanism. As always, it is framed as saving the global climate. Alongside the climate rhetoric, the EU Commission has announced that 25% of CBAM revenues from 2028 and 2029 will be returned to affected importers — a generously staged gesture that barely conceals the fact that Brussels has secured another independent revenue stream. More than €2 billion will flow into EU coffers annually.
For central planners in Brussels and Berlin, the establishment of this morally-tinged CO2 business has fulfilled a small dream. Last year, the emissions trading system reached a volume of around €100 billion, of which €21 billion flowed into the German treasury alone.
With each passing year, these revenues will continue to grow until industrial value creation is largely eroded, as evidenced by the ongoing deindustrialisation in Germany. Yet the policymakers’ horizon rarely extends beyond the established seven-year plans. Beyond that, the implicit logic is that officeholders have already financially secured themselves.
The ongoing financial bleeding of companies and households to fund a steadily growing climate and subsidy apparatus marks a dangerous shift in economic balance. Value creation is systematically drained, while a politically administered redistribution mechanism operates increasingly detached from real economic performance. Where fiscal burden, regulatory pressure, and moral overreach intersect, not only is economic freedom restricted, but the space for open societal debate is also narrowed. Experience shows: the more political projects rely on coercion and sanctioning, the lower their acceptance — and the greater the temptation to suppress criticism through censorship (chat control, DSA).
Another often overlooked aspect of the new mechanism is its clear protectionist effect. In EU-Europe, few want to admit that their own climate policy has severely damaged free trade. Instead, attention is deflected to U.S. trade policies, even as CBAM itself is intended to serve as a protective wall, as German Environment Minister Carsten Schneider (SPD) naively consecrated.
The Protectionism Spiral and the End of Industry
Alongside the massive bureaucracy Brussels imposes on European business, upstream costs are rising sharply. At the same time, the risk of retaliatory measures from major trade partners such as China, India, or the United States increases. Neither Brussels, Berlin, nor Paris appears to have seriously considered the classic boomerang effect of massively higher production costs in Europe on global markets.
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Instead, EU policymakers remain trapped in a climate-socialist bubble, pushing the game forward relentlessly. In light of the visible decline of large parts of European industry, Ursula von der Leyen, Friedrich Merz, and others keep the debate over bureaucratic burdens, deregulation, and fiscal relief simmering in the media — while simultaneously creating facts in legislation, forcing businesses and consumers into costly climate constraints.
Policymakers seriously believe they can weather the economic crisis and retreat into a climate-socialist paradise with near-global control of the economy.
Importers will also feel the full force of Euro bureaucracy. In the future, only authorised CBAM filers may import affected goods into the EU. Companies must disclose financial reliability and document internal control systems. Brussels flexes its muscles — and the business community remains silent.
None of the major trade associations or mid-sized business representatives dared publicly voice opposition during the pilot phase or now with the implementation of this new levy. Silence prevails. In German industry, the “sacred cow” of climate socialism is untouched, while companies hope for a subsidy windfall that allows unearned profits under the guise of green patronage economics.
Thus, 2026 begins as 2025 ended: with an expanding state apparatus that vampirically drains the private sector. At its core, this is a social experiment on a living body. The question remains: at what point will civil society pull the plug on a policy that systematically extracts its economic base?
As of January 1, policymakers have shifted up a gear and can claim an initial victory. One can only hope it ends as a Pyrrhic one.
