The European Parliament's Environment Committee has voted to expand the EU's Carbon Border Adjustment Mechanism (CBAM) to cover more downstream products like machinery, vehicle components, and construction equipment. The move aims to prevent carbon leakage where EU manufacturers shift production to countries with weaker climate rules. The committee also added anti-circumvention measures targeting slightly modified goods and online sales loopholes. The committee rejected a proposal to allow Paris Agreement Article 6 carbon credits against CBAM obligations, leaving that for the EU ETS revision. A temporary decarbonisation fund was also adopted to support EU producers of CBAM goods, running from 2027 to 2029. Parliament is expected to finalize its negotiating position in September.
