European Parliament Calls for Expansion of Carbon Border Adjustment Mechanism Scope

The European Parliament has called for an expansion of the scope of the European Union's Carbon Border Adjustment Mechanism (CBAM). The Parliament argues that the current regulation should cover not only raw materials but also final products that are steel- and aluminium-intensive. The proposed expanded product range includes items such as automotive parts, washing machines, fasteners, wire, springs, and household goods. This step aims to prevent carbon leakage and establish a trade policy aligned with the EU's climate goals. CBAM aims to ensure a level playing field between domestic producers and importers by pricing carbon emissions from the production of certain goods imported into the EU. Expanding the scope could introduce additional costs and compliance obligations for businesses operating in the steel and aluminium sectors. The Parliament's request is considered part of the steps taken under the EU's Green Deal strategy. If the proposal becomes law, it is expected to have significant effects on supply chains and cost structures in the relevant sectors. Not investment advice.