Expansion of the CBAM to Downstream Products: Which Goods Are Expected to Be Affected Starting in 2028

As of July 2026

The scope of goods covered by the CBAM is currently being redefined: Following the vote by the European Parliament’s Committee on the Environment (ENVI) on July 6, 2026, up to 457 downstream products are to be included in the carbon border adjustment mechanism, ranging from fasteners to solar panels and heat pumps. The planned effective date is January 1, 2028. For importers, preparations will begin much earlier.

What is the CBAM expansion to downstream products?

The CBAM expansion refers to the planned extension of the EU’s carbon border adjustment mechanism from six raw material categories to downstream products with a high steel or aluminum content. The European Commission presented a proposal for a regulation on this matter in December 2025; the Council and Parliament adopted their positions in June and July 2026. The expanded scope is set to take effect on January 1, 2028.

The background: As long as only raw materials are subject to pricing, it makes more sense to import the finished screw or machine part rather than the steel itself. The expansion is intended to close precisely this gap. Our article on the interaction between CBAM and the EU Emissions Trading System explains how the border adjustment is methodologically linked to emissions trading.

Which goods are covered by the CBAM—today and starting in 2028?

Since January 1, 2026, the CBAM has covered imports of iron and steel, cement, fertilizers, aluminum, electricity, and hydrogen (European Commission, 2026). Starting January 1, 2028, depending on the outcome of negotiations, between approximately 180 and 457 downstream products are expected to be added, such as machine parts, fasteners, household appliances, solar panels, and heat pumps.

The range between the three lists is a point of negotiation for the trilogue. For the impact analysis, it is therefore advisable to look at the most comprehensive list: Those included on that list should plan to be covered starting in 2028.

What did the ENVI Committee decide on July 6, 2026?

On July 6, 2026, the European Parliament’s Environment Committee voted 56 in favor, 11 against, and 12 abstentions to expand the CBAM to a total of 457 products and, at the same time, tightened the rules against circumvention (ESG Today, July 2026). The proposed exemption clause in Article 27a was deleted.

An overview of the key points of the Parliament's position:

• Article 27a is deleted: Instead of exempting products from the CBAM in the event of price shocks, it should be possible to temporarily redirect CBAM revenues to the affected sectors.
• Burden of Proof in Cases of Suspected Circumvention: For imports from countries with a high risk of circumvention, the default emission values of the actual country of origin shall apply.
• No international CO₂ credits: The Parliament has eliminated the option to count Article 6 credits toward CBAM obligations, citing insufficient climate integrity.
• E-commerce within the scope of application: Distance sales via online platforms should also be included to close a loophole in the regulations.
• Slightly modified goods: The rules for “slightly modified” products are extended to include minor processing, provided that the modification is intended to circumvent the CBAM.

At the same time, the committee adopted its position on the Temporary Decarbonization Fund (TDF): 600 million euros for energy-intensive EU manufacturers, covering the period from 2027 to 2029, with the scope of support expanded to include fertilizer products (Akin Gump and ESG Today, July 2026).

What is the timeline leading up to the effective date in 2028?

The European Parliament plans to adopt its negotiating position during its plenary session in September 2026; trilogue negotiations with the Council and the Commission will begin thereafter. The final regulation is expected to be adopted in late 2026 or early 2027 (Akin Gump, July 2026). The expanded scope of application is set to take effect on January 1, 2028.

Noteworthy is the Council’s call for an annual review mechanism: Starting in 2028, the Commission is to report each year on which additional downstream products should be added to Annex I (Council of the EU, June 2026). The list of goods would thus not be a static document, but would grow regularly.

What does the CBAM expansion mean for importers?

Importers should not wait until the final legislative text has been adopted to determine how they will be affected. Anyone importing goods from the product groups under discussion will need, as of January 1, 2028 , reliable emissions data from their suppliers, a clear point of responsibility within the company, and a budget for CBAM allowances; the price for Q2 2026 is 75.28 euros per metric ton of CO₂ (European Commission, July 2026).

Four steps have proven effective during the preparation process:

1. Check which tariff codes are affected: Compare the import product range with the lists of goods from the Commission, the Council, and the Parliament, preferably using the CN codes in Council document ST-10423-2026. The most comprehensive list defines the planning scenario.
2. Secure emissions data from suppliers: Actual manufacturer data is generally more cost-effective than default values. Companies that systematically collect product-specific emissions data—for example, through a product carbon footprint (PCF)—are in a stronger negotiating position.
3. Calculating Costs: The price of the certificate is based on the EU Emissions Trading System. The calculation is based on the embodied emissions of imports; a clear understanding of Scope 1, 2, and 3 emissions along the supply chain is helpful from a methodological perspective.
4. Define Responsibilities and Processes: CBAM registrant status, data flows between customs, procurement, and sustainability, and quarterly reporting should all be managed by a single entity. Our CBAM Reporting and Compliance services page illustrates how this can be structured organizationally.

Our assessment: Clarify the impact now, not in 2027

From a consulting perspective, the direction is clear: the Commission, the Council, and the Parliament all want to expand the scope, but there is disagreement over the extent of that expansion. We consider it unlikely that the trilogue will fall short of the Commission’s list of approximately 180 products. A compromise between the Council’s and the Parliament’s positions is a realistic outcome.

In our experience, the bottleneck is not the legal analysis, but rather data collection from suppliers. Gathering emissions data from suppliers outside the EU typically takes several months, including follow-up inquiries, plausibility checks, and renegotiations. Anyone who waits until after the final regulation is published to begin this process will find themselves under time pressure in 2028.

In addition, the stricter anti-circumvention rules make workarounds unattractive. Minor product modifications or detours through third countries are explicitly addressed. Predictable compliance is therefore more cost-effective than avoidance tactics, especially since the annual review mechanism is likely to expand the list of goods over time.

Conclusion: The list of products is growing—preparation starts with your own product lineup

The CBAM expansion will be phased in, but it is coming: All three EU institutions support the extension to downstream products effective January 1, 2028. For importers, this means: compare their own customs tariff codes with the lists under discussion, verify the data available from suppliers, and define responsibilities. Those who have clarified these three points before the trilogue is concluded will be able to implement the final regulation without rushing and take advantage of cost savings through real emissions data.

Sources

1. Akin Gump: CBAM Expansion Set to Impact Global Supply Chains (July 9, 2026) — https://www.akingump.com/en/insights/alerts/cbam-expansion-poised-to-impact-global-supply-chains
2. ESG Today: EU Lawmakers Vote to Expand the List of Products Subject to the CBAM Carbon Import Tax (July 7, 2026) — https://www.esgtoday.com/eu-lawmakers-vote-to-expand-list-of-products-under-cbam-carbon-import-tax/
3. Council of the European Union: Position on the Amendment to the CBAM Regulation, Document ST-10423-2026-INIT (June 12, 2026) — https://data.consilium.europa.eu/doc/document/ST-10423-2026-INIT/en/pdf
4. European Commission: Carbon Border Adjustment Mechanism – Overview (accessed in July 2026) — https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
5. European Commission: Price of CBAM certificates (accessed in July 2026) — https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/price-cbam-certificates_en