European Commission launches public consultation on possible CBAM expansion

The European Commission has opened a public consultation on a potential extension of the Carbon Border Adjustment Mechanism (CBAM) to include certain downstream products. This initiative, part of the broader European Steel and Metals Action Plan, seeks to address the risk of carbon leakage in supply chains.

Carbon leakage can occur when manufacturers relocate production outside the EU to circumvent carbon-related costs or when EU-based buyers source products from countries with less stringent climate policies. To counter such effects, the Commission is also considering additional anti-circumvention measures targeting transactions lacking clear economic justification.

The consultation invites feedback on several areas, including the possible extension of CBAM to downstream products, rules regarding electricity, and new enforcement measures. Stakeholders are also asked to comment on the potential economic, environmental, social, and administrative impacts of the proposed changes.

The Commission is seeking input from a broad range of actors, including:

• Companies involved in the production, trading, or warehousing of CBAM-related goods;

• Industry associations representing producers of basic and downstream goods;

• NGOs and academic institutions, with a particular focus on relevant scientific research and data;

• Public authorities such as customs bodies; and

• Trade unions.

The initiative is part of the EU’s efforts to align trade and climate policy under its better regulation agenda, aiming to ensure that future measures are both effective and evidence-based.

Source: European Commission