The documents outline a substantial widening of CBAM’s product coverage into downstream manufactured metal goods. If confirmed, these amendments would represent the most significant extension of the regulation’s scope since its introduction.
Earlier this year, Europe’s steel distributors urged the Commission to extend CBAM and other trade defense instruments to cover high-risk steel-containing goods.
The newly covered sectors will be included from January 1, 2028, Fastmarkets understands, subject to final adoption of the addition.
The proposal was published on the website of the European Commission’s Directorate-General for Taxation and Customs Union (DG TAXUD), together with several other CBAM-related documents.
Provisional benchmarks and default values published on the website were unchanged from those outlined in drafts leaked last week.
Combined metal products brought into scope
The new annexes show sweeping additions, particularly in the newly introduced “combined metal products” category. This includes metal mesh and netting, fasteners, hardware fittings, pumps, burners, refrigeration equipment, industrial machinery, electrical motors and transformers, conductors and cables, cranes and conveyors, and even metal furniture and prefabricated buildings.
Several categories of goods vehicles, chassis, gearboxes, wheels, suspension systems, and radiators have also been added.
Market participants noted that these additions represented a major shift in the architecture of CBAM, which originally focused on upstream commodities such as flat steel and basic aluminium. By contrast, downstream manufactured goods – often containing mixed metal inputs – will now require emissions accounting and CBAM declaration at customs.
“This is going to hit a much broader part of the value chain than expected,” a European trader said. “Importers of machinery, equipment, components – they will all become CBAM operators.”
Revisions affecting iron and steel
The amendment also offered massive expansion to the iron and steel table, notably suggestions to cover structures, cast articles, containers, tubes, fittings, springs, fasteners, and household metal goods.
A full list of the CN codes of good covered by CBAM can be found at the DG TAXUD link above.
Scrap clarified as precursor
The updated documents also introduced new rules for scrap used as an input material in imported downstream goods. While scrap itself remained outside CBAM’s scope and was not a CBAM-taxed import, embedded emissions from pre-consumer scrap must now be counted when calculating the total emissions of complex goods.
This only concerned pre-consumer scrap, however, while post-consumer scrap was still assigned zero embedded emissions.
The Commission introduced these clarifications “to avoid loopholes in emissions reporting for goods with recycled content,” one market source said.
Industry reaction
Overall, market reaction to the downstream expansion of CBAM was mixed.
Representatives of the steel processing sector largely welcomed the move, claiming that it “closed the loopholes” and would shield the EU’s manufacturing sector.
“That’s very positive news. It seems that most of the relevant items are added to the system,” a steel-service centre in Italy said.
But some felt that the delayed inclusion of imported steel derivatives – steel-intensive imported products – into the scope of CBAM was “wrong.”
“Better late than never, but 2028 is way too late,” another steel service centre in Southern Europe said. “We will lose manufacturing industry by then.”
At the same time, other market sources told Fastmarkets that the extensions would significantly increase the administrative burden for importers of finished and semi-finished goods, but noted that the Commission intended these measures to prevent carbon leakage across longer value chains.
“Best intentions, but messy result. A lot of companies are waking up to the fact that their CN code is now on the list and they are unable to manage CBAM complexity and the financial burden,” a steel trader in Italy said.
“Manufacturing hubs exporting machinery or components into Europe are now in scope,” a trading source in Germany said. “The downstream effect is very real. I think it’s great for steel-service centres, but a disaster for the EU economy.”
Some industry participants highlighted the lack of preparedness among downstream sectors that had not expected CBAM to apply to their goods.
The VDMA (Association of German Mechanical and Plant Engineering) was even more outspoken, claiming that the CBAM expansion “threatens Europe’s mechanical engineering industry.”
“The Commission fails to recognize that extending the scope to other steel- and aluminium-intensive downstream products, such as cranes or machine parts, would further increase costs and bureaucratic burdens for the mechanical engineering sector. This would also significantly increase the risk of production relocating out of the EU,” Holger Kunze, head of the VDMA’s European office, said on December 17.
Next steps
While the updated CBAM annexes and related documents have been published on the European Commission’s DG TAXUD website, they have not yet appeared in the EU Official Journal. Market sources said that the measures were considered technically final, but still subject to formal adoption.
Many market sources earlier suggested December 17-18 as possible dates for a final updates rollout. As of December 17, however, no updates have been published in the EU Official Journal.
