CBAM is expanding: carbon border tax will affect another 180 products

The European Parliament Committee on the Environment (ENVI) on July 7 supported the expansion of the Carbon Border Adjustment Mechanism (CBAM) to include 180 downstream products and also added new measures against circumvention of the mechanism.

CBAM was adopted in 2023, entered into force at the beginning of 2026 and is intended to prevent so‑called carbon leakage — the relocation of emission‑intensive production to countries with looser climate rules. Importers must purchase CBAM certificates that equalise the difference between the carbon price paid by European producers under the ETS and the price actually paid by producers outside the EU. Until now this applied to basic materials — aluminium, cement, electricity and steel.

What is changing:

1. Expansion along the chain towards final products. The Commission’s proposal from December 2025 added 180 products with a high risk of carbon leakage and a high share of steel or aluminium — engineering, metal goods, automotive components, household appliances and construction equipment. The logic is simple: taxing raw steel but not finished products made from it would only shift the production of those downstream products abroad.

2. Tightening against circumvention. Until now it was enough to slightly modify a product and it fell outside the scope of CBAM; ENVI’s position extends this rule to minor processing — but limits it to changes made deliberately to evade the fee, not to ordinary business decisions. Rules for online sales have also been added and the Commission will receive the authority to apply default values based on the actual country of origin where a pattern of circumvention is detected.

3. Response to price shocks instead of exemptions. The Commission had proposed temporarily exempting CBAM‑covered goods during price shocks; the committee instead chose to temporarily redirect CBAM revenues to the affected sectors — keeping the mechanism untouched.

4. Article 6 of the Paris Agreement was dropped. The committee crossed out the Commission’s proposal to allow companies to offset carbon credits under Article 6 against CBAM obligations, stating that this belongs to the upcoming revision of the EU ETS.

5. Decarbonisation fund earlier and broader. ENVI expanded eligible products to include fertilizer manufacturers (urea, ammonium nitrate, ammonium sulfate) and moved the fund’s operation to 2027–2029 instead of the originally planned start in 2028.

The Parliament is to finalise its position at the September plenary session, after which trilogues with the Commission and the Council, which adopted its stance already in June, will begin. The Council meanwhile wants a broader list of products, whereas ENVI places more emphasis on enforcement — and this difference will need to be reconciled in the trilogue.

For Czech exporters and importers this means one thing: if you import engineering components, metal products or auto parts from countries outside the EU, start mapping the carbon footprint of your suppliers now. The period when CBAM dealt only with steelworks is ending.

Source: OneStop ESG, 8 July 2026

Source: https://onestopesg.com/esg-news/eu-cbam-carbon-border-tax-expansion