EU Reviews Potential CBAM Expansion to Downstream Sectors

Evaluation of CBAM Extension

The European Commission is assessing the possibility of broadening the Carbon Border Adjustment Mechanism (CBAM) to encompass downstream industries. This move aims to address rising costs for downstream products and safeguard local steel supply chains, a shift welcomed by European steel associations and member states.

Steel Industry Support for CBAM Growth

Advocates like Eurofer are pressing for the CBAM’s extension, emphasizing its importance in controlling carbon emissions and managing increasing import pressures. The current exclusion of downstream industries raises fears of “carbon leakage,” where companies may relocate to regions with looser climate regulations.

Call for a Holistic Approach

Paolo Sangoi, president of the Italian steel association, has highlighted that neglecting downstream sectors could weaken the CBAM’s overall effectiveness. Steelmaker ArcelorMittal has also urged for prompt measures to protect the EU steel market, stressing the urgency of the extension.

International Perspectives on CBAM

As nations like Canada, the US, and ASEAN contemplate their own CBAM frameworks, the UK plans to introduce its version in 2027. However, UK Steel is advocating for a 2026 implementation to synchronize more closely with the EU’s timeline, reinforcing the need for cohesive global strategies.