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# Trends - EU expands CBAM to downstream products to prevent carbon leakage
- URL: https://atlas.tilkal.com/trends-eu-expands-cbam-to-downstream-products-to-prevent-carbon-leakage/
- Published: 2026-07-24T07:00:33.000Z
- Updated: 2026-09-11T15:43:38.000Z
- Description: The European Council has agreed to expand the Carbon Border Adjustment Mechanism (CBAM), the EU’s carbon tax on imports, to include downstream products
- Author: Tilkal
- Tags: Compliance, Environment, EU, Europe, Global, News

\[Last update July 2026\] The **European Council** has agreed to expand the **Carbon Border Adjustment Mechanism (CBAM)**, the EU’s carbon tax on imports, to include **downstream products** such as machinery, construction equipment, and vehicle components. This move aims to prevent **"carbon leakage"**—where production shifts from EU manufacturers to countries with weaker climate policies.

**Key Updates:**

- The Council’s position **goes beyond the European Commission’s proposal**, adding more industrial products (e.g., forklifts, conveyor equipment, electric motor components) to CBAM’s scope.
- **Annual reviews** will assess further expansions to address loopholes and carbon leakage risks.
- The expansion builds on CBAM’s 2026 launch, which initially targeted basic materials like steel, aluminum, and cement.

The Council’s stance aligns with the Commission’s anti-circumvention measures, including **enhanced reporting** and **authority to tackle abuses**. Negotiations with the **European Parliament** (expected to finalize its position in September) will follow.

*The EU Commission stated*: *“This demonstrates strong support for CBAM and a firm commitment to ensuring it remains effective in advancing the EU’s climate objectives.”*

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*Source:* [*ESG Today*](https://www.esgtoday.com/eu-member-states-agree-to-expand-cbam-carbon-import-tax-to-downstream-products/?ref=atlas.tilkal.com)