Joint High-Level Statement on the Extension of the Carbon Border Adjustment Mechanism (CBAM) to downstream industries

While the CBAM represents a first attempt in addressing carbon leakage risks in upstream materials, its current scope is insufficient to ensure a level playing field across the full value chain. Downstream sectors, including energy, mobility, machinery, cookware, cutlery, catering equipment, packaging, construction, clean tech, defence, home appliances, hand tools and metal goods, are increasingly exposed to competition from imports of carbon-intensive finished products that fall outside the mechanism’s coverage. This creates a growing imbalance, as European manufacturers face higher costs linked to carbon constraints, while competing imports are not subject to equivalent requirements. There is an urgent need to act in order to prevent further delocalisation.

The Commission proposal remains too narrow and entails a high risk of circumvention. Without an immediate broadening of the scope, CBAM risks shifting carbon leakage further downstream and creating distortions within the value chains. This weakens incentives for investment in low-carbon production and undermines the effectiveness of EU industrial and climate policies.

Extending the CBAM to downstream steel and aluminium-intensive products with a simple and swift procedure is therefore crucial to provide a level playing field, support ongoing industrial transformation, and ensure consistency across the value chains.