News Details

On 15 September 2026, the European Parliament adopted its position for negotiations with the EU Member States on proposed changes to strengthen and expand the EU’s Carbon Border Adjustment Mechanism (CBAM). The position was approved by 464 votes to 50, with 159 abstentions.

The proposed amendments would extend CBAM beyond basic materials to cover a wider range of downstream steel and aluminium products. These include finished goods such as fasteners, wire, springs and household items.

Parliament expanded the proposed product coverage beyond that initially suggested by the European Commission. MEPs also proposed an exemption for electricity imported from non-EU countries where grid operators use it to maintain the stability of the electricity network.

Stronger anti-circumvention rules

Parliament also supported stricter measures to prevent companies from avoiding CBAM requirements through minor modifications to goods or changes to trade arrangements. It also proposed allowing the Commission to apply default values from a product’s true country of origin where a pattern of circumvention has been established. These rules would target arrangements created specifically to avoid CBAM, rather than ordinary business decisions intended to reduce costs.

MEPs rejected a proposed safeguard that would have allowed goods to be temporarily exempted from CBAM in response to significant price increases. Instead, Parliament proposed redirecting CBAM revenue from affected goods to the relevant sectors temporarily.

The position also includes simplified reporting requirements and technical assistance for the least developed countries. Parliament removed the Commission’s proposal to allow carbon credits issued under Article 6 of the Paris Agreement to be deducted from CBAM obligations.

Temporary decarbonisation fund

Parliament also adopted its position on the related Temporary Decarbonisation Fund (TDF), which is intended to support EU producers competing in export markets.

MEPs proposed that the fund should operate from 2027 to 2029, instead of only in 2028. They also want fertiliser producers and downstream users affected by higher carbon-related input costs to qualify for support. Eligible products would include urea, ammonium nitrate and ammonium sulphate.

Parliament is now ready to begin negotiations with EU member states on the final shape of the proposals.