EU member states are pushing to broaden the Carbon Border Adjustment Mechanism (CBAM) to cover more downstream goods, according to a Law360 report. The expansion would extend the carbon cost beyond raw materials like steel and aluminum to include finished products that use them, such as car parts and machinery. This could significantly widen the scope of industries affected by the carbon border tax and increase compliance requirements for importers. The move reflects growing pressure from EU governments to prevent carbon leakage and ensure that the bloc's climate policies capture emissions embedded in a wider range of imported goods. If adopted, the downstream expansion would require importers to track and report embedded emissions across more complex supply chains. Companies that already comply with CBAM for upstream materials should start assessing how far their products fall within the expanded scope.
