MEPs support broader CBAM and stronger safeguards

The Environment Committee’s position aims to apply CBAM to a broader range of products and businesses in the future, including certain downstream goods and e-commerce imports. While the European Parliament has yet to vote on the Committee’s proposal, it gives a strong indication of the Parliament’s approach to the upcoming trilogue negotiations. Companies should monitor developments closely and assess whether their imports could fall within the expanded scope. Businesses sourcing goods from countries considered at higher risk of circumvention may also face increased scrutiny and reporting requirements. Taking time now to understand potential impacts can help avoid surprises and ensure a smoother transition as the CBAM framework continues to evolve.

Since the beginning of 2026, CBAM operates in its definitive phase. It requires importers of raw materials and (semi-) finished goods in scope of CBAM to report embedded greenhouse gas emissions and surrender CBAM certificates. The primary sectors currently covered include iron and steel, aluminium, cement, fertilizers, hydrogen, and electricity.

To prevent carbon leakage and anti-circumvention along the value chain, the European Commission proposes expanding the scope to cover manufactured goods that contain a high share of steel or aluminium. Under the extension proposed by the European Commission, 180 downstream products are to be added to the CBAM scope on 1 January 2028. The Environment Committee has proposed to expand the CBAM scope even further, increasing the extension of CBAM to 457 downstream products.

Alongside the proposed extension of CBAM to downstream products, the Environment Committee has put forward several other measures aimed at strengthening the mechanism. These include stricter anti-circumvention rules targeting practices designed to avoid CBAM obligations through minor product modifications or processing changes. These processing changes may include, for example, carrying out limited processing outside the EU – such as cutting, coating, drilling, assembling, or otherwise finishing steel or aluminium inputs – so that the imported item is classified as a downstream product or different customs category rather than as the original CBAM-covered material. The anti-circumvention rules are intended to capture such artificial changes where they are mainly designed to avoid CBAM, while safeguarding legitimate business decisions aimed at improving efficiency, reducing costs, meeting customer specifications, or improving product performance.

The Committee has also proposed removing both the option to use international carbon credits for CBAM compliance and the proposed “escape clause” in Article 27a. Removing the option to use international carbon credits would mean that importers could not reduce or offset their CBAM liability by relying on carbon credits generated outside the EU, for example from voluntary offset projects or international emissions-reduction schemes. Instead, CBAM compliance would remain tied to the purchase and surrender of CBAM certificates, with the CBAM cost reflecting the embedded emissions of the imported goods, adjusted only in line with the rules on any carbon price effectively paid in the country of origin. Article 27a would have allowed the Commission, in serious and unforeseen circumstances, to temporarily exclude certain goods from the CBAM scope. Critics argued that such a clause could create uncertainty for businesses and investors, because companies would have less visibility on whether CBAM obligations would continue to apply consistently to particular goods, and on what criteria any temporary exclusion would be granted. The Committee’s position also seeks to address potential circumvention through e-commerce channels, for example where goods are imported in small consignments or through online sales structures. 

The Proposal to amend the CBAM regulation follows the ordinary legislative procedure, which means that the Proposal needs to be adopted by both the Council of the EU and the European Parliament. The proposal has been sent to both to each examine the proposal and propose amendments. The Council agreed its position on 12 June 2026. The next step for the European Parliament is a plenary vote on the Environment Committees position. This vote will likely take place in September, with the aim to conclude negotiations before the end of this year. After that the proposal can be formally adopted.

As said before, after the Proposal is adopted, the scope extension takes effect as from 1 January 2028.