MEPs back a bigger CBAM: Parliament votes for 457 downstream products
The vote we have had on thewatch list all month has now happened. On 15 September the European Parliamentadopted its negotiating position on the proposal to extend CBAM to downstreamgoods, by 464 votes to 50 with 159 abstentions. The position is not yet law. Itis, though, the clearest statement so far of where the extension is heading,and Parliament wants it to go considerably further than the Commission asked.
A longer list than Brussels proposed
The Commission’s Februaryproposal covered around 180 additional downstream products. The Council’s Junegeneral approach stretched that to roughly 200 [confirm the Council figureagainst the general approach text]. Parliament has now backed a list reportedat 457 product lines [confirm the final product count against the adoptedtext]. The core idea is unchanged: finished and semi-finished goods with a highsteel or aluminium content, including fasteners, wire, springs and householdarticles, would carry a CBAM charge just as the basic materials already do.Coverage of the vote also names consumer-facing categories such as solarpanels, heat pumps and domestic appliances among Parliament’s additions [verifythese categories against the adopted amendments before publication].
The logic will be familiar toanyone who has followed the scheme’s first year. If raw steel pays at theborder but a box of screws made from that steel does not, production of thescrews migrates outside the EU and the carbon leakage simply moves down thevalue chain. Parliament’s answer is to widen the net.
Loopholes closed, safety valve removed
MEPs also sharpened theanti-circumvention rules. The threshold for treating a minor modification of aproduct as circumvention comes down, and the rules are aimed at arrangementsset up purely to avoid CBAM rather than at ordinary commercial decisions. Wherea pattern of circumvention emerges, the Commission would be able to applydefault values based on the goods’ true country of origin. Coverage of the votealso reports lower thresholds for small aluminium consignments and theinclusion of post-consumer aluminium scrap [verify both points against theadopted text].
One proposal did not survive.The Commission had suggested an emergency clause allowing goods to be taken outof CBAM during severe price shocks. Parliament deleted it, preferring toredirect CBAM revenue towards affected sectors instead. A narrow exemption wasadded for electricity flows that non-EU grid operators use to keep networksstable, and least-developed countries would get simplified reporting.
In a separate vote, 433 to 97,Parliament adopted its position on the Temporary Decarbonisation Fund thataccompanies the extension. MEPs want it running from 2027 to 2029, a yearearlier than proposed, with fertiliser producers among those eligible.
What happens next
Parliament and Council nownegotiate the final text, with the Council’s June position as the other side ofthe table. The Commission’s proposal targets application of the extended scopefrom 1 January 2028 [confirm the application date against the proposal and anytrilogue outcome]. Until an amending regulation is in force, the current CBAMscope continues to apply.
Why UK exporters should read the product list
For UK manufacturers sellingfinished or semi-finished metal goods into the EU, this is the strongest signalyet that CBAM will not stop at basic materials. A business exporting fasteners,wire products or fabricated components has so far watched the scheme from thesidelines. From 2028 it may need embedded emissions data for every consignment,reaching back through its own steel and aluminium purchases to installationlevel. That data takes months to assemble, and the suppliers who hold it willbe answering the same question for every customer at once. The sensible move isto start asking before the regulation makes it compulsory.
CBAM-Assured trains exporters,importers and their advisers to build the emissions data the extended CBAM willdemand; contact us if your products are on Parliament’s list.