EU Parliament Backs Expanding CBAM to Steel and Aluminium End Goods

The European Parliament has approved its negotiating position on extending the Carbon Border Adjustment Mechanism (CBAM) to cover downstream steel and aluminium products, including fasteners, wire, springs, and finished household goods. This goes beyond the European Commission's original proposal, broadening the carbon border tax to more manufactured items. The move aims to close loopholes and curb resource shuffling from China, while also adding an exemption for electricity flows used by grid operators for network stability. Lawmakers also backed a temporary decarbonisation fund (TDF) to protect EU exporters, with support running from 2027 to 2029, earlier than the Commission's 2028 start. The fund would open to fertiliser producers and downstream users, covering products like urea and ammonium nitrate. Any leftover TDF revenue would go to international climate finance under the Paris Agreement. Negotiations with EU member states now begin to finalise the legislation.