EU Parliament Supports Wider CBAM Scope from 2028

On 15 September 2026, the European Parliament adopted its position on proposed changes to the EU Carbon Border Adjustment Mechanism (CBAM). The changes would extend CBAM to more downstream products and strengthen measures against circumvention.

The proposed extension focuses on finished and semi-finished goods with a high steel or aluminium content. It includes machinery, industrial equipment, vehicle components, household appliances and construction products.

Examples include gearboxes, gears, clutches, transmission shafts, fasteners, springs and wire products. Parliament supported the Commission’s proposal to add approximately 180 downstream products and proposed extending the list further.

The expanded scope is currently expected to apply from 1 January 2028. However, the final list of covered products has not yet been agreed.

Anti-circumvention measures

Parliament also backed stricter measures to prevent businesses from avoiding CBAM requirements. The proposed measures address practices such as making minor changes to products or redirecting lower-emission goods to the EU market without reducing emissions across overall production.

Where a pattern of circumvention is identified, Parliament wants the Commission to be able to apply default emission values based on the product’s actual country of origin. At the same time, MEPs proposed limiting the rules to arrangements established specifically to avoid CBAM, rather than ordinary business decisions intended to reduce costs.

Parliament also proposed simplified reporting for least-developed countries and a technical assistance framework. It rejected the possibility of using carbon credits issued under Article 6 of the Paris Agreement to reduce CBAM obligations.

Support for EU producers

In a separate vote, Parliament adopted its position on a temporary decarbonisation fund. The fund would support EU producers facing carbon-related costs when competing in export markets.

Parliament wants the support to apply from 2027 to 2029. It also wants fertiliser producers and downstream users to be eligible, including those connected with products such as urea, ammonium nitrate and ammonium sulphate.

Next steps

Parliament will now begin negotiations with the Council on the final legislation. The Council adopted its negotiating position in June 2026, but the institutions must still agree on the final product list, anti-circumvention provisions and implementation rules.

The proposed extension is therefore not yet legally binding. Companies importing steel- or aluminium-intensive finished products should nevertheless assess their product classifications and supply chains. They should also identify the emissions data that may be required if their products enter the CBAM scope in 2028.

Source:  Strengthening the EU Carbon Border Adjustment Mechanism and closing loopholes; and text adopted on 15 September 2026.