CBAM is edging closer to finished goods. On 16 September 2026, the European Parliament adopted its negotiating position on expanding the Carbon Border Adjustment Mechanism to downstream products – and went considerably further than either the European Commission or the Council.
WHERE CBAM STANDS TODAY
CBAM has been in its definitive phase since 1 January 2026 and currently covers cement, iron and steel, aluminium, fertilisers, electricity, hydrogen and certain precursors. Authorised declarants must purchase CBAM certificates for these goods based on embedded emissions, with credit given for carbon prices already paid elsewhere.
FROM 180 TO NEARLY 460 PRODUCTS
- Commission proposal (17 December 2025): around 180 downstream products with a high carbon leakage risk and an average steel or aluminium content of 79%
- Council general approach (12 June 2026): expanded to around 200 products – metal-intensive industrial, construction and electrical equipment goods
- Parliament’s negotiating position (16 September 2026): around 457 product groups – more than double the Commission’s original proposal
- Product categories named: fasteners, wire, springs, household articles, machinery components, industrial equipment, vehicle parts, domestic appliances, fabricated metal products and construction equipment
- Estimated impact: around 7,500 new importers fall within CBAM scope under the Council’s narrower list – likely considerably more under Parliament’s broader version
OTHER CHOICES PARLIAMENT MADE
Parliament rejected the Commission’s proposed safeguard mechanism that would have allowed products to be temporarily removed from CBAM scope during price shocks, opting instead for temporary redirection of CBAM revenues to the sectors affected.
MEPs also proposed simplified reporting requirements for least-developed countries alongside a technical assistance framework, and removed the option to offset CBAM obligations with Article 6 carbon credits under the Paris Agreement – that question now moves to the forthcoming ETS revision. Parliament further backed a temporary decarbonisation fund (2027-2029) for EU exporters exposed to carbon leakage in export markets, including certain fertiliser producers and their downstream users.
The proposal also includes an annual review from 2028 to identify further candidates for inclusion – a signal that this expansion is unlikely to be the last.
WHAT COULD FOLLOW AFTER THIS
Beyond this expansion round, further developments are already being discussed: split CN codes, a gradual extension to indirect emissions in additional sectors, and possible future inclusion of chemicals and polymers, subject to further assessment. For businesses in those sectors, this is an early signal to keep watching, even while they remain outside the current proposed product lists.
WHAT HAPPENS NEXT
With Parliament’s position adopted, trilogue negotiations with the Council can now begin to agree a final text. Until an amending regulation is actually adopted, the current, narrower CBAM scope remains in force – nothing changes in practice yet. The Council has named 1 January 2028 as the intended start date for the expanded scope, but the final product list and timing depend on the outcome of the trilogue.
WHAT TO DO
- Check whether your product portfolio falls under any of the three proposed lists – use Parliament’s broader list as your worst-case planning scenario
- Map your supply chain for steel and aluminium content, including components and semi-finished goods you would not currently consider “CBAM-relevant”
- Start building emissions data collection with your suppliers now – this consistently takes longer than businesses expect
- Track the trilogue negotiations: the final product list and start date are not yet settled
THE BOTTOM LINE
CBAM is evolving from a regulation covering raw and semi-finished materials into one that reaches deep into manufacturing supply chains. Companies that do not see themselves as “CBAM importers” today would do well to revisit that assumption – this week’s Parliament position makes clear the scope is more likely to widen than narrow. For the broader compliance context, see our article on the EU customs reform (https://smarttradecompliance.com/2026/05/11/eu-customs-reform/).
Smart Trade Compliance advises importers and manufacturers on CBAM and EU customs compliance. Have questions about what this means for your organisation? Contact us. (https://smarttradecompliance.com/contact)
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