Signal European Parliament votes to widen CBAM scope and close loopholes

Summary

The European Parliament's plenary adopted its negotiating position to expand the Carbon Border Adjustment Mechanism's (CBAM) scope to downstream steel and aluminium products, including fasteners, wire, springs, and pipes. Parliament's Environment Committee position would expand the mechanism to 457 products, well beyond the European Commission's original proposal of 180 products or the Council of the EU's position of 200. Parliament strengthened anti-circumvention rules designed to prevent minor product modifications from being used to bypass CBAM. It rejected the Commission's proposed safeguard clause (Article 27a), which would have allowed CBAM to be suspended in the event of price shocks. Parliament also called for the 'Temporary Decarbonisation Fund,' intended to protect the export competitiveness of EU producers, to be introduced a year earlier than the Commission's proposed 2028, in 2027. Negotiations between the Council presidency and Parliament are expected to begin shortly after Parliament's adoption, with both sides aiming for agreement before the end of the year.