Commission Enhances Carbon Border Adjustment Mechanism
- CBAM expands to include 180 steel and aluminium-intensive products from January 1, 2026.
- A temporary fund will reimburse EU producers for carbon costs, funded by 25% of CBAM certificate sales.
- The Commission introduces anti-circumvention measures and enhanced reporting for CBAM goods.
- The CBAM review report highlights its role in promoting global decarbonisation.
Expansion of CBAM
The European Commission is set to expand the Carbon Border Adjustment Mechanism (CBAM) from January 1, 2026, to include 180 steel and aluminium-intensive downstream products. This move aims to prevent carbon leakage by ensuring that emissions are reduced rather than relocated, leveling the playing field for EU-produced materials subject to the EU's Emissions Trading System (ETS).
Anti-Circumvention Measures
To address circumvention risks, the Commission is implementing enhanced reporting requirements and incorporating pre-consumer aluminium and steel scrap in CBAM calculations. These measures aim to ensure fair carbon pricing for both EU-made and imported goods, while tackling evidence-based abuses circumventing CBAM's financial responsibilities.
Temporary Decarbonisation Fund
A temporary fund has been launched to support EU producers of CBAM goods and mitigate carbon leakage risks. The fund will reimburse a portion of the EU-ETS carbon costs for goods still facing carbon leakage risks, with financing coming from member state contributions, constituting 25% of revenues from CBAM certificate sales in 2026 and 2027.
CBAM Review Report
The Commission published a report reviewing CBAM's performance during its transitional period from October 2023 to the end of 2025. The report highlights CBAM's role in promoting decarbonisation beyond EU borders, facilitated by outreach and technical aid, and sets out the implementation roadmap for a definitive regime from 2026 onwards.
Source: EIB