BRUSSELS, Dec. 17 (Xinhua) -- The European Commission on Wednesday unveiled a proposal to strengthen the EU's Carbon Border Adjustment Mechanism (CBAM), including an expansion of its product coverage, tougher anti-circumvention provisions, and a support tool for EU producers.
Under the proposals, CBAM would be extended beyond the current focus on basic materials to include 180 steel- and aluminium-intensive downstream products, spanning sectors such as machinery, hardware and metal fabrications, vehicle components, domestic appliances including washing machines, and construction equipment, according to a statement.
The Commission also proposed anti-circumvention measures. These include bringing pre-consumer aluminium and steel scrap within the accounting framework, tightening reporting requirements, and other measures, in an effort to improve traceability and address potential under-reporting of emissions intensity.
In parallel, the Commission proposed setting up a fund to support EU producers of CBAM goods. Part of the funding would come from member state contributions linked to 25 percent of CBAM certificate sale revenues from 2026 to 2027, the statement said.
CBAM is the EU's measure designed to place a carbon price on emissions embedded in certain carbon-intensive goods entering the EU and to align the carbon cost of imports with that faced by EU producers under the EU Emissions Trading System (EU ETS). CBAM has operated in a transitional phase from 2023 to 2025, with the definitive regime starting on Jan. 1, 2026.
The Commission said that after the transitional period, CBAM's financial adjustment will be progressively phased in from 2026, mirroring the gradual phase-out of free allocations under the EU ETS through 2034.
Since its launch, CBAM, sometimes referred to as a "carbon tariff," has drawn pushback from some EU trading partners, who argue it risks shifting compliance burdens onto exporters, particularly in developing economies, and could evolve into a new form of "green trade barrier" through complex data and certification requirements. ■
