The European Union is considering expanding the Carbon Border Adjustment Mechanism (CBAM) beyond basic metals to cover additional downstream manufactured goods. The change would broaden the range of components and industrial equipment in scope, affecting exporters and European buyers using established international supply chains.
In an impact assessment based on 2024 trade data, the European Commission estimated that exports covered under a “balanced expansion” option would total about €18 billion for China and €8 billion for Türkiye. The same analysis estimated comparable exposure of €6 billion for the United States, €5 billion for the United Kingdom, and €3 billion for Japan.
The Commission figures relate to an assessed policy option rather than actual 2026 imports, the final negotiated product list, or estimated CBAM payments. The Council and European Parliament have proposed broader product coverage, which could materially alter exposure for individual trading partners.
Estimated CBAM exposure under a balanced expansion option
The European Commission’s assessment uses 2024 trade data to estimate export values that would be covered under its balanced expansion scenario. For China and Türkiye, the estimated covered exports are €18 billion and €8 billion, respectively.
The same impact assessment provides reference figures for other countries included in the analysis. It estimates exposure of €6 billion for the United States, €5 billion for the United Kingdom, and €3 billion for Japan.
These estimates are tied to a specific policy option and do not represent final outcomes. Changes to the product list during negotiations, including proposals from EU institutions beyond the Commission’s scenario, could shift which trade flows are affected.
China’s manufacturing scale and potential sourcing adjustments
The analysis links China’s potential exposure to the scale of its manufacturing supply to European markets. For EU importers, replacing a component supplier may require new tooling, technical qualification, and production trials.
The need for those steps can add costs and potential delays during procurement transitions. Carbon-related costs could also raise the price of Chinese components without immediately removing European demand.
The commercial effect is described as depending on product characteristics and supplier capabilities. Where suppliers provide significant production capacity or specialised technical expertise, buyers may find switching sources more complex than comparing quoted prices.
Türkiye’s proximity and established industrial relationships
The sourcing position described for Türkiye reflects its proximity to major EU markets and existing industrial relationships with European customers. Shorter delivery routes and established supplier networks can support continued purchasing as buyers reassess carbon-related costs.
The advantages cited do not create a CBAM exemption. They also cannot automatically offset higher emissions assessments tied to covered goods.
The relative attractiveness of Turkish suppliers is described as depending on combined factors including production costs, logistics arrangements, emissions evidence, and any applicable CBAM liability.
Supplier-level emissions evidence versus country rankings
The exposure described in the analysis varies among producers within both China and Türkiye. Different metal inputs, production routes, and manufacturing processes can produce different recognised emissions even when suppliers operate in the same country or make comparable products.
A country-level ranking can help identify where trade exposure may be concentrated. However, it cannot replace installation-level emissions evidence when buyers compare individual suppliers.
Procurement decisions are expected to require information connecting finished products to relevant inputs and production processes. This includes documentation that links emissions claims to the specific installations involved in producing covered goods.
Supply-chain changes and anti-circumvention requirements
The analysis cautions that routing goods through another country should not be treated as a straightforward way to eliminate precursor emissions. Any revised supply chain must reflect genuine production activities and be supported by defensible records.
The proposed anti-circumvention provisions increase the importance of identifying the production installation associated with an emissions claim. Changes in where final processing occurs do not by themselves establish that underlying metal or other relevant inputs have a different emissions profile.
For European procurement teams, the immediate priority is described as modelling supplier-specific landed costs alongside financial and operational consequences of switching. The analysis also notes that broad assumptions about imports disappearing from one country or another country gaining market share provide a weak basis for sourcing decisions.
The proposed expansion could place established trade relationships under pressure, but headline export values alone do not determine outcomes. Exporters are expected to defend both price information and emissions evidence for each affected product while European buyers assess whether alternative suppliers can meet comparable quality, capacity, reliability, and competitive total cost requirements.