The European Union’s proposed overhaul of the Carbon Border Adjustment Mechanism (CBAM) is shifting attention toward how embedded emissions are calculated and evidenced, while also sharpening the focus on which imported products fall under the scheme. Policymakers are trying to ensure that carbon-related charges cannot be reduced through accounting approaches that do not translate into real-world emission cuts. The direction of travel matters for industrial exporters and importers across Europe, including supply chains feeding Southeast Europe’s energy-intensive sectors.
At the centre of the debate is how emissions claims are substantiated before they are used in CBAM declarations. Negotiators are weighing additional safeguards intended to prevent practices that may make individual shipments appear cleaner than the producer’s overall operations. While the EU acknowledges that allocating output to specific shipments is not automatically unlawful, regulators are seeking stronger guardrails against allocations that cannot be verified.
One concern is “resource shuffling”, where a producer directs lower-emission output to EU customers while selling higher-emission material elsewhere. This can reduce the apparent carbon footprint of particular EU shipments without changing total emissions across the producer’s operations. For compliance teams, the practical implication is that shipment-level documentation may need to withstand scrutiny against broader production and material movement evidence.
In parallel, the Commission, Council and Parliament are negotiating further anti-circumvention measures that could affect how emissions information is collected, allocated and assessed. The European Commission’s December 2025 proposal, the Council’s June 2026 negotiating mandate and the European Parliament’s September 2026 position form part of this process. The final design of any added controls is still under discussion, including what triggers enhanced scrutiny and what evidence would be required.
Potential changes discussed in the negotiations include closer examination of actual-emissions data in higher-risk circumstances and stronger requirements relating to material composition. However, key operational details remain unsettled, including the conditions for applying extra checks, the supporting documentation expected from companies and the powers available to reject or replace claimed emissions data. Companies preparing for implementation therefore face a compliance planning challenge: separating what is already required under the current framework from what could be added later.
Metal scrap introduces a separate set of accounting questions that can affect both reported emissions and commercial outcomes. Pre-consumer metal scrap generated during manufacturing can carry a different emissions history and regulatory treatment than post-consumer recycled material. How these inputs are handled in emissions calculations influences the apparent carbon benefit attributed to secondary production and an exporter’s ability to substantiate low-emission claims.
EU policymakers caution against oversimplification in which all scrap inputs are treated as automatically having zero emissions. The appropriate treatment depends on the applicable methodology as well as characteristics of the material and the production process. As a result, clear records covering scrap origin, quantities, processing steps and end use could become increasingly important as the EU develops its approach to both emissions accounting and circumvention risks.
These technical accounting debates are closely tied to financial incentives created by CBAM itself. Importers have incentives to establish lower embedded-emissions values where those values can be properly substantiated. For 2026 trading conditions, CBAM certificate pricing provides a reference point: in the third quarter of 2026, certificates were priced at €82.32 per tonne of CO₂ equivalent, about 9.4% higher than in the second quarter.
As benchmark-related deductions decline over time, differences in calculated emissions may carry greater commercial consequences. Even relatively small variations in emissions per tonne of metal can affect costs when applied across large shipment volumes. This raises the compliance stakes for distinguishing genuine emissions reductions from changes in allocation or presentation of existing production.
Under tighter scrutiny scenarios, record-keeping requirements for producers could expand beyond shipment-specific data. Stronger controls would increase reliance on plant-wide mass balances, meter records, scrap procurement registers and documented product-allocation methods. Such documentation can help show whether reported emissions figures align with actual movement of materials and with how production proceeds.
For verifiers, proposed approaches would place more emphasis on tracing emissions claims through production activity and material flows rather than relying only on declarations prepared for individual shipments. EU importers would still remain responsible for ensuring that information used in their CBAM declarations is accurate under applicable rules. The quality of supporting evidence could also influence how quickly companies respond to verification requests and demonstrate that reported emissions reflect relevant production activities.
The compliance picture also intersects with rules governing steel origin, even though these frameworks serve different purposes. A separate EU steel quota regime includes traceability provisions designed to identify where steel was melted and poured. Those traceability requirements are intended for trade-defence objectives and should not be treated as a complete methodology for calculating embedded emissions under CBAM.
Still, some underlying production and supply-chain records may overlap between systems, creating an incentive for companies to maintain consistent documentation practices across regulatory regimes. Companies preparing for final CBAM legislation are advised not to assume that a particular recycling practice, contractual arrangement or emissions-allocation method will automatically receive favourable treatment. A more reliable approach highlighted by negotiators is maintaining a documented, verifiable methodology that can be updated once anti-circumvention provisions are adopted.
Taken together, the negotiations point toward an increasingly evidence-driven model of CBAM compliance where substantiation becomes as important as product coverage and financial liability calculations. The outcome may depend on how regulators define higher-risk circumstances for enhanced checks and what powers they will have to challenge or replace claimed emissions data. For industrial exporters supplying EU markets—and for importers building CBAM declarations—these developments suggest that robust documentation across production records, material flows and scrap accounting will be central as certificate prices continue to shape commercial incentives.