EU CBAM Draft Expansion: Carbon Tariffs on Downstream Products to Be Imposed in 2026

Recently, the EU unveiled a draft for the Carbon Border Adjustment Mechanism (CBAM), expanding the tax scope from raw materials like steel and aluminum to downstream assembled products, including automotive parts (where steel and aluminum account for over 50%), home appliances (over 30%), and gardening tools (over 20%). The implementation will occur in three phases: starting from October 2023, a transition period for data reporting; in January 2025, the declaration will open; and by January 2026, full payment obligations will be implemented. The fees will be calculated as (emissions - free allowances) × carbon price - already paid costs. Sellers are advised to self-check their products, build green supply chains, and establish compliance databases.