A coalition of 162 European industry associations and companies, including the European Steel Association (EUROFER), the European Federation of Steel, Tubes and Metals Distribution & Trade (EUROMETAL), and major producers such as ArcelorMittal, thyssenkrupp and Voestalpine, has called on EU policymakers to expand the scope of the Carbon Border Adjustment Mechanism (CBAM).
Industry stakeholders argue that while CBAM addresses carbon leakage risks for upstream materials like steel and aluminum, it fails to cover downstream products. This limitation leaves large parts of the value chain exposed to imports that are not subject to equivalent carbon costs.
Downstream industries face growing pressure
Sectors including energy, mobility, construction, machinery, packaging, defense, and home appliances are increasingly affected.
These industries face rising costs under EU climate policies while competing imports benefit from less stringent environmental regulations, creating a competitive imbalance.
Risk of carbon leakage shifting downstream
The coalition warned that the current system may unintentionally shift carbon leakage further along the value chain rather than eliminating it. This creates a risk of production relocation to regions with lower environmental standards, undermining EU climate objectives.
According to industry representatives, failing to expand CBAM could weaken incentives for investment in low-carbon production. The current framework risks distorting supply chains and reducing the effectiveness of decarbonization policies.
Call for rapid and simplified extension
The coalition is urging the European Parliament and Council to implement a fast and simplified expansion of CBAM to include downstream steel- and aluminum-intensive products. Such a move is seen as critical to ensuring a level playing field and protecting European industry.
Axel Eggert, director general of EUROFER, emphasized that without broader coverage, importers may bypass carbon costs by shifting emissions downstream. He stressed that expanding CBAM is essential to maintaining fair competition and ensuring the mechanism achieves its intended environmental and industrial objectives.
