EU member states have agreed to expand the Carbon Border Adjustment Mechanism (CBAM) to cover more downstream products like manufactured goods made from steel and aluminum. The revised framework also adds anti-circumvention measures, including bringing pre-consumer metal scrap into scope and giving the Commission power to act on deceptive reporting practices. The goal is to prevent companies from bypassing the carbon price on imports by shifting to semi-finished goods. Negotiations with the European Parliament are expected to start later this year. The Council also outlined criteria for temporary exemptions in cases of severe market disruption or price spikes. This tightening signals the EU's intent to make CBAM harder to evade as it moves from raw materials toward finished products, which could have significant implications for global supply chains and carbon accounting.
