The European Parliament has adopted a negotiating position to expand the EU's Carbon Border Adjustment Mechanism (CBAM) to cover more downstream steel and aluminium products. This move aims to close loopholes that allow carbon-intensive materials to be processed into finished goods and avoid the border charge. The Parliament's position adds about 200 products, up from the Commission's proposal of 180, and strengthens anti-circumvention rules, including measures against resource shuffling. The expansion is part of a broader effort to address carbon leakage beyond the factory gate. CBAM currently applies to cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. By extending coverage to finished products, the EU wants to ensure that embedded emissions are accounted for throughout the value chain. This also pushes companies to obtain verified product-level emissions data from suppliers, linking CBAM to Scope 3 reporting. Negotiations with EU member states will now determine the final product list and enforcement details. For businesses selling into the EU, the takeaway is clear: reliable carbon data is becoming a commercial requirement, not just a reporting exercise.
