Background

Regulation (EU) 2023/956 establishing a Carbon Border Adjustment Mechanism ('CBAM Regulation') aims to prevent the risk of carbon leakage for certain goods containing embedded greenhouse gas emissions imported into the EU. For the moment, the mechanism applies to cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. The regulation was first amended in 2025 (Regulation (EU) 2025/2083) to simplify and strengthen the mechanism.

European Commission proposal

The Commission's proposal would add to the CBAM's scope: 180 downstream products with a high carbon leakage risk and a high share of steel and/or aluminium content (on average, 79 % steel or aluminium content); additional reporting requirements in specific cases to better capture the composition of CBAM goods; measures to encourage the decarbonisation of electricity imports by modifying and streamlining the methodology to calculate the embedded electricity emissions; and allow for the removal of a CBAM good in serious and unforeseen circumstances (urgency procedure).

Council position

The Council agreed its general approach on 12 June 2026, expanding the Commission's list to cover 200 additional metal-intensive industrial, construction, and electrical equipment goods under CBAM. It would require the Commission to conduct an annual review from 2028 to identify and recommend further downstream products for inclusion. The Council proposed to delimit the Commission's power to grant temporary exemptions during crises (Article 27a).

European Parliament position

The Committee on Environment, Climate and Food Safety (ENVI) adopted its report on 9 July 2026. The report would expand the scope to 457 products and define terms such as 'pre-consumer aluminium scrap' and 'resource shuffling'. It details assessment criteria for goods and origins at high risk of abusive practices. It proposes to allow for default values to apply in candidate countries facing exceptional and immediate security situations and to provide technical assistance. It adds provisions on technical assistance to least-developed countries; international cooperation on carbon pricing; and monitoring and enforcement of the single mass-based threshold for importers for distance sales. ENVI also deletes Article 27a but adds the possibility of a temporary derogation for outermost regions if severe harm is caused due to CBAM. Lastly, ENVI proposes to ensure that online platforms facilitating imports of goods are equally subject to the regulation. Once voted in plenary, the report will set Parliament's position for negotiations with the Council.

First-reading report: 2025/0419(COD); Committee responsible: ENVI; Rapporteur: Mohammed Chahim (S&D, the Netherlands). For further information see our 'EU Legislation in progress' briefing.