The European automotive sector is concerned about the expansion of the scope of the CBAM
Auto Industry Urges Limits on EU CBAM Expansion
European automotive associations are urging EU policymakers to adopt a narrower and more proportionate expansion of the Carbon Border Adjustment Mechanism to downstream products, warning that the current proposals could raise compliance costs and administrative burdens across steel- and aluminium-intensive supply chains.
- Joint industry position: ACEA, CLEPA and TyresEurope support CBAM's climate objective but want a more targeted downstream expansion.
- Core concern: Hundreds of additional product codes could substantially increase reporting, verification and compliance requirements.
- Implementation: The Commission proposed downstream expansion from January 1, 2028; ACEA has previously called for implementation to be delayed until 2030.
- Carbon-cost risk: Automotive groups want safeguards against steel and aluminium carbon costs being counted more than once through complex supply chains.
- Legislative status: The Council and European Parliament have adopted negotiating positions, and the file is moving into interinstitutional negotiations.
The downstream CBAM debate is commercially important for steel because it determines how far carbon-cost protection follows European material into fabricated products. Extending the mechanism to steel-intensive components could reduce the cost advantage of imported downstream goods made from higher-carbon steel, but a very broad scope would also push reporting and verification obligations much deeper into manufacturing supply chains. For steelmakers and major steel users, the final product list, emissions methodology and rules against double counting may therefore matter as much as the headline 2028 implementation date.
The European Automobile Manufacturers' Association (ACEA), European Association of Automotive Suppliers (CLEPA) and TyresEurope have called on EU policymakers to adopt a more limited and proportionate expansion of the Carbon Border Adjustment Mechanism (CBAM) to downstream products.
The three associations issued a joint position on October 5 ahead of interinstitutional negotiations over changes to the CBAM Regulation.
They said they support the mechanism's objective of preventing carbon leakage, but argued that downstream products should be brought into scope only where a meaningful carbon-leakage risk can be demonstrated and where emissions calculation, data collection and verification systems are sufficiently developed.
Automotive Groups Warn of Heavy Compliance Burden
The industry groups said CBAM already presents implementation challenges even before any major downstream expansion.
Their concerns include a shortage of accredited emissions verifiers, substantial reporting requirements and the need to process imports carrying only very small carbon liabilities.
ACEA, CLEPA and TyresEurope said the negotiating positions adopted by the European Parliament and Council could magnify those problems because the expansion under discussion would bring hundreds of additional Combined Nomenclature (CN) product codes into the mechanism.
Commission Initially Proposed About 180 Downstream Products
The European Commission proposed the latest CBAM expansion in December 2025.
Its proposal would extend the mechanism from January 1, 2028 to approximately 180 steel- and aluminium-intensive downstream products.
The products were selected because the Commission considers them exposed to a combination of carbon-leakage risk, significant steel or aluminium content and sufficient technical feasibility for calculating embedded emissions.
European Parliament research estimates that the products in the Commission proposal contain an average of approximately 79% steel and/or aluminium, with most consisting of industrial supply-chain goods such as metal components, specialised machinery and equipment.
| Institution | Position | Status |
|---|---|---|
| European Commission | Approx. 180 additional steel- and aluminium-intensive downstream products | Proposed Dec. 2025 |
| Council of the EU | Supports downstream extension with a revised product list and annual future reviews | Position adopted June 12, 2026 |
| European Parliament | Supports a broader extension than the Commission proposal | Position adopted Sept. 15, 2026 |
Parliament Backs Broader Downstream Scope
The European Parliament adopted its negotiating position on September 15 by 464 votes to 50, with 159 abstentions.
Members supported extending CBAM beyond basic materials to a wider range of finished steel- and aluminium-containing products, including categories such as fasteners, wire, springs and certain household products.
Parliament's position goes further than the Commission's initial product list and is now subject to negotiations with the Council.
Automotive Industry Says 2028 Is Too Early
The Commission proposal would apply the downstream extension from January 1, 2028.
ACEA has argued that the timetable is too aggressive because the existing CBAM only became fully operational on January 1, 2026.
The association has previously recommended postponing a broader downstream extension until 2030, allowing more time to assess the operation of the existing mechanism and address verifier capacity and reporting issues.
In their latest joint position, ACEA, CLEPA and TyresEurope again called for feasible implementation deadlines rather than introducing extensive downstream reporting obligations before the initial system has been fully evaluated.
| Timing | Position |
|---|---|
| Jan. 1, 2026 | CBAM becomes fully operational |
| Jan. 1, 2028 | Commission's proposed start for downstream extension |
| 2030 | ACEA's previously recommended implementation date |
Industry Warns Against Double Carbon Costs
Automotive manufacturers and suppliers are major purchasers of steel and aluminium and already face carbon-related costs embedded in material produced within the European Union.
The associations said downstream CBAM rules must therefore prevent those carbon costs from being counted repeatedly as steel or aluminium passes through multiple stages of component manufacturing.
CLEPA said the joint industry position specifically warns against a double carbon-cost burden across the automotive value chain.
The groups want the mechanism to protect European industry from carbon leakage without simply transferring compliance costs and leakage risks further downstream.
De Minimis Thresholds Are Another Point of Dispute
The automotive associations also want the EU to reconsider proposed changes to CBAM's de minimis thresholds.
These thresholds are intended to reduce reporting obligations where imported quantities and associated carbon exposure are comparatively small.
CLEPA said the joint letter calls for retaining the existing 50-tonne threshold for aluminium products rather than lowering it to 5 tonnes under the broader Parliament approach.
The associations argue that lowering thresholds while simultaneously adding large numbers of downstream product categories could substantially expand the number of transactions requiring emissions reporting and verification.
Council Supports Extension but Retains Emergency Safeguard
The Council of the EU adopted its negotiating position on June 12.
The Council supports extending CBAM to selected downstream products and also backs additional anti-circumvention measures, including provisions involving pre-consumer metal scrap.
Unlike Parliament, the Council retained a mechanism under which goods could temporarily be exempted from CBAM in serious and unforeseen circumstances causing severe disruption to the EU internal market.
The Council said such exemptions should be based on clear and objective criteria, including exposure within the EU to severe price increases.
Parliament Rejects Price-Shock Exemption
The European Parliament took a different position on the proposed emergency safeguard.
MEPs rejected the Commission's proposal that would have allowed specified goods to be temporarily removed from CBAM in the event of severe price-related disruption.
Instead, Parliament proposed a mechanism under which CBAM revenues generated by the affected products could temporarily be redirected toward sectors experiencing severe disturbances in the EU internal market.
Steel and Aluminium Users Face Direct Exposure
The automotive industry's concern is particularly relevant to steel because vehicles and components contain large quantities of flat steel, speciality steels, aluminium and fabricated metal products.
ACEA has said its members import tens of thousands of different products, many containing material already covered by CBAM.
Extending the mechanism further downstream would therefore require manufacturers to trace embedded emissions through more complex, multi-tier supplier networks rather than only accounting for imports of primary steel or aluminium products.
The automotive groups said this should occur only where the carbon-leakage risk justifies the additional compliance burden and where reliable emissions data and verification systems exist.
Primary industry source: ACEA, CLEPA and TyresEurope joint statement, October 5, 2026.
Legislative sources: European Commission; Council of the European Union; European Parliament.
Also Read
- EUROFER Cuts 2026 EU Steel Demand Growth Forecast to 0.1%
- EU Steel Exports Fall 20% Y/Y in H1 2026
Steel News
- Nucor has raised the price of hot-rolled coils to $1,230 per tonne
- AISI: US raw steel production in week ending October 3 rises y-o-y
- Cleveland-Cliffs is investing $200 million in the expansion of the Butler Works plant in the US
Steel Export Market Prices
| Material | Price | Change |
|---|---|---|
| Stainless Seamless Pipe 304 108*4 mm | $ 2196.65 | 11.34 |
| Stainless Scrap 304 Solid | $ 1296.97 | -12.95 |
| Stainless Bar 321 60 mm | $ 2197.04 | -13.10 |
| Stainless Bar 304 60 mm | $ 1956.28 | -13.25 |
| Stainless HR Coil 304/No.1 6.0 mm | $ 1902.08 | -9.39 |