EU considers extending CBAM to more manufactured goods
15 June 2026
The European Union has agreed plans to significantly expand the scope of its Carbon Border Adjustment Mechanism (CBAM), bringing hundreds of additional steel and aluminium-intensive manufactured products within the regime. The move is designed to prevent businesses from avoiding carbon-related charges by importing finished goods instead of primary materials.
CBAM currently applies to imports of carbon-intensive products including iron, steel, aluminium, cement, fertilisers, electricity and hydrogen. The latest proposals would extend coverage to a much wider range of downstream and manufactured products that contain significant quantities of steel and aluminium.
Products potentially affected include machinery, industrial equipment, appliances, construction products and other manufactured goods containing steel and aluminium components. The expanded scope is expected to take effect from 2028, subject to final legislative approval.
For UK exporters, the changes could create additional compliance requirements when selling into the EU market.
Potential implications include:
- Increased carbon reporting obligations
- Additional documentation requirements
- Potential cost increases linked to embedded carbon emissions
- Greater scrutiny of supply chains and manufacturing processes
- Wider CBAM exposure for manufacturers of finished products
The development is particularly relevant for businesses that may not currently consider themselves affected by CBAM because they export finished goods rather than raw materials.
For UK importers, the expansion may also have indirect consequences. Businesses sourcing products through EU supply chains could see higher compliance costs passed through the supply chain, potentially affecting pricing and procurement decisions.
The proposals form part of the EU's wider strategy to prevent carbon leakage and maintain a level playing field for EU manufacturers operating under the bloc's emissions trading system. The European Commission has indicated that expanding CBAM coverage is necessary to close loopholes and ensure carbon costs apply consistently across supply chains.
As the scope of CBAM continues to widen, UK businesses trading with the EU should review their product classifications, supply chains and carbon data requirements to assess whether future obligations may apply.
By Carla Assunção, Chamber International
We can help businesses understand CBAM requirements, assess supply chain exposure and prepare for changing international trade regulations. Speak to our team.
