What happened
The European Parliament has adopted its negotiating mandate for revisions to the EU Carbon Border Adjustment Mechanism (CBAM), with 464 votes in favour and 50 against. The mandate calls for CBAM to cover over 450 further products, substantially exceeding the European Commission’s proposed addition of 180 steel- and aluminium-intensive downstream goods.
The proposed scope includes photovoltaic modules, heat-pump equipment and household appliances. It would also exempt electricity entering from non-EU countries when grid operators use those flows to maintain network stability.
For importers and suppliers, the immediate task is to review product portfolios and emissions-data readiness against a potentially wider CBAM perimeter. The Parliament’s position is not yet final law.
Why it matters
CBAM is intended to address carbon leakage by aligning the carbon cost of imports with that faced by EU producers under the EU Emissions Trading System. Importers buy CBAM certificates to cover the difference between the EU carbon price and carbon costs paid in the country of production.
The Parliament also supports measures intended to prevent minor product changes being used to avoid CBAM, while limiting the rules to changes made for that purpose rather than normal commercial decisions. It proposes replacing a price-shock provision that could remove goods from scope with temporary redirection of relevant CBAM revenues to affected sectors. Simplified reporting for least-developed countries is also included.
What happens next
Parliament will negotiate with EU member states in the Council, which adopted its own position in June. Separately, Parliament supports a temporary decarbonisation fund running from 2027 to 2029. Its version would extend coverage to fertiliser manufacturers and users of carbon-intensive inputs, including urea, ammonium nitrate and ammonium sulphate.
