EU member states have agreed to expand the Carbon Border Adjustment Mechanism (CBAM) to include more downstream products such as machinery, vehicle components, and electrical equipment. The move aims to prevent carbon leakage where production shifts to countries with weaker climate policies. The Council's position goes further than the European Commission's original proposal by adding a wider range of metal-intensive goods. The CBAM, which took effect in early 2026, requires importers to buy certificates matching the EU's carbon price under the Emissions Trading System. The expansion targets steel and aluminum-intensive products like forklifts, conveyor equipment, and electric motor parts. The European Parliament is expected to adopt its position in September, with annual reviews planned to potentially add more products.
