EU Tightens the CBAM Loop; Carbon Tax Scope Extends to Hundreds of Downstream Steel and Aluminum Products

Steel World Review – The European Union is taking a new step toward tightening the “Carbon Border Adjustment Mechanism” (CBAM), a change that could expand the scope of these regulations from raw materials and basic steel products to a broader range of downstream industrial goods and make the entry of steel- and aluminum-intensive products into the European market more stringent.
According to Steel World Review, based on a report published by the Siderweb editorial team for Made in Steel, the European Parliament has supported the latest review of strengthening CBAM and regulations to counter circumvention of this mechanism. The issue was discussed at the European Parliament’s plenary session on September 14 and a decision was made on September 15, 2026.
The key point for the steel industry is that the issue is no longer limited to direct imports of crude steel or basic products. The European Commission’s initial proposal included adding 180 downstream products at high risk of carbon leakage; products that, on average, consist of around 79 percent steel or aluminum. The Council of the European Union expanded the proposed scope to around 200 products, while the European Parliament’s Environment Committee has put forward a much broader scope, including 457 products.
These products could cover a wide range of industrial goods, equipment, construction products and goods in which steel and aluminum account for a significant share of their composition. In this way, CBAM is gradually evolving from a regulation focused on raw materials into an instrument that could also affect downstream segments of the metals value chain.
Europe Seeks to Close CBAM Circumvention Routes
Another important part of the reforms concerns combating methods of circumventing the regulations. The European Union is concerned that some exporters or supply chains could reduce CBAM costs by changing trade routes, altering the composition of goods, or providing information that does not reflect the actual carbon intensity of emissions.
Accordingly, the proposed regulations introduce additional reporting requirements to clarify the actual composition of products and even consider the artificial alteration of supply chains to benefit from lower default carbon values as one of the potential forms of CBAM circumvention.
The European Parliament has also brought the issue of resource shuffling, or the targeted relocation of resources and products with the aim of supplying low-carbon production to the European market and directing high-carbon production to other markets, into the regulatory discussion.
Warning Bell for Steel Exporters
This development is particularly important for steel producers and exporters outside the European Union. Under the new structure, price, quality and transportation costs alone will not determine competitiveness; the product’s carbon emissions, the traceability of production data and the ability to prove actual emissions intensity could also directly affect the cost of access to the European market.
CBAM currently covers cement, iron and steel, aluminum, fertilizers, electricity and hydrogen, and the European Union’s objective is to prevent the relocation of carbon-intensive production outside the Union’s borders and the subsequent import of those same products into the European market.
For Iran’s steel industry, this development is also significant, because even in cases where direct exports of a steel product to the European Union are limited, the expansion of CBAM to downstream products could, in the future, affect supply chains, supplier selection, carbon footprint calculations and competitive conditions in international markets.
According to Made in Steel, this development is part of the European Union’s efforts to strengthen CBAM and anti-circumvention measures.
The important point is that the final scope still needs to be established through the European Union’s legislative process; therefore, the figures of 180, 200 and 457 products represent the differing positions of the Commission, Council and Parliament at different stages of this case and the 457 products should not yet be considered the final list that is legally enforceable.
Edited and rewritten by: Steel World Review, based on the Siderweb / Made in Steel report and European Parliament documents
Made in Steel report on strengthening CBAM⁠CBAM file at the European Parliament⁠