The EU is preparing to significantly broaden the scope of CBAM, bringing a wide range of finished goods — including car doors, garden tools, washing machines, and kitchen ovens — under the carbon border tax for the first time. According to EU officials, the long-awaited review will be published before year’s end, although internal negotiations may delay the announcement by a week. The updated package will introduce additional anti-evasion safeguards and outline support measures for European exporters, ensuring the system is in place before the carbon levy becomes financially binding on importers from January 1.
The expansion aims to close loopholes that allow carbon-intensive materials to be processed into end products outside the EU and then imported without paying a carbon charge. These loopholes include sending carbon-intensive materials such as steel or aluminium to neighbouring countries for light processing — for example cutting, coating, or basic assembly — so that the final product receives a new customs code and enters the EU without a carbon charge. Companies can also shift production to jurisdictions with weaker oversight, converting high-emission inputs into finished goods that currently fall outside the CBAM scope.
This downstream extension, however, has generated mixed reactions. Industry groups in sectors such as automotive and solar equipment caution that the change could raise supply-chain costs and impose new administrative burdens, while others argue it will secure fair global competition.
If your company needs guidance on preparing for expanded CBAM obligations, CBAM Reports is ready to provide support with calculating
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