EU institutions are working towards a late-November agreement on extending the Carbon Border Adjustment Mechanism (CBAM) to additional manufactured goods, potentially bringing more downstream products containing steel and aluminium within the carbon-border framework.
Carbon Pulse reported the negotiating target on 21 September. The timetable concerns the political negotiations and does not establish a date when additional products will automatically become subject to CBAM charges.
The European Commission’s proposal, COM(2025) 989, identifies 180 additional commodity codes for possible downstream coverage. The proposed expansion is intended to address the risk of production moving from materials already covered by CBAM towards finished products manufactured outside the mechanism’s scope.
Parliament backs broader downstream coverage
The European Parliament adopted its negotiating position on 15 September, supporting wider product coverage together with measures designed to address circumvention.
The final list of products and the detailed rules for implementation have not yet been agreed. The proposed commodity codes should therefore be distinguished from products that are currently subject to CBAM obligations.
For importers and manufacturers, customs classification will be a primary operational issue if the expansion is adopted.
A product containing steel or aluminium will not automatically fall within CBAM merely because those materials are present in it. Coverage will depend on the final legislation and the applicable customs commodity code.
Downstream coverage increases emissions-data requirements
An expanded scope would also create additional data requirements further along industrial supply chains.
Manufacturers could need to connect finished products with embedded-emissions information relating to material inputs purchased from multiple producers. Information such as the weight of a steel or aluminium component shown on a purchase invoice may not, by itself, establish the component’s embedded emissions.
Companies can begin identifying potentially affected commodity codes and reviewing relevant suppliers while negotiations continue.
However, proposed coverage should not be treated as a current CBAM charging obligation, just as businesses should not assume that existing exclusions will remain permanently outside the mechanism.
November target narrows preparation window
The proposed late-November negotiating target gives companies a limited period in which to assess potentially affected supply chains before the final scope is established.
The decisive legal step will be the adoption of the final legislation, including the products covered by the downstream extension and the dates from which the new requirements would apply.
