The European Union is working on extending the Carbon Border Adjustment Mechanism (CBAM) beyond primary steel and aluminium to selected finished goods. The proposed downstream scope could include fasteners, wire, springs, household articles and other metal-intensive products starting in 2028. The expansion is described as a proposal rather than enacted law.
The European Commission presented its CBAM expansion proposal in December 2025 under legislative file 2025/0419(COD). The Council of the European Union adopted its position in June 2026, and the European Parliament approved first-reading amendments in September. The legislative file is now moving through interinstitutional negotiations.
Downstream scope under CBAM proposal
The Commission’s approach would bring additional stages of metal processing within the CBAM framework for selected downstream products. The coverage is intended to apply from 2028 to finished goods identified as metal-intensive. The proposal targets products beyond primary steel and aluminium.
The policy objective is to address carbon leakage risks that could shift further along manufacturing value chains. If imported steel becomes more costly under CBAM while steel-intensive finished products remain outside the mechanism, fabrication could be moved abroad. Completed components could then be exported to the EU without an equivalent carbon adjustment.
Legislative timeline and negotiation status
CBAM expansion remains subject to the ongoing legislative process. After the Commission’s December 2025 proposal, the Council’s June 2026 position and the Parliament’s September first-reading amendments shaped a broader downstream scope in several areas. The file continues through interinstitutional negotiations.
The current stage means implementation details tied to customs and product coverage are still evolving. The proposal’s potential start date remains linked to 2028, with the mechanism designed to extend carbon-related requirements beyond primary materials. Further changes could occur as negotiations progress.
Compliance implications for Serbia and regional exporters
For Serbia and other Southeast European manufacturing hubs, the legislative file could affect how exporters supply EU markets. Companies producing fabricated metal products, fasteners, wire, components and machinery parts may face a shift from indirect impacts through steel and aluminium costs to direct inclusion if their goods fall within CBAM coverage.
A European Commission technical Q&A highlights that compliance may involve detailed accounting for transformation processes. It notes that system boundaries for steel and aluminium transformation can be complex. It also indicates that precursor emissions may require weighted-average calculations.
The same technical guidance points to supplier-specific emissions values depending on evidence that relevant input materials were used in production. This implies that documentation requirements could extend to how inputs are tracked through manufacturing stages. For exporters, this can affect how carbon information is assembled for covered goods.
Data systems, procurement records and supplier evidence
Downstream manufacturers are advised not to wait for changes in customs classifications before preparing data systems. Procurement records and enterprise resource planning (ERP) systems may need to support carbon information linked to production batches and input materials. Warehouse traceability and metering are also identified as elements that may be required.
Supplier contracts may need to include provisions enabling emissions data collection tied to production processes. EU buyers could introduce these requirements ahead of the proposed implementation date. Long-term sourcing contracts signed in 2027 may allocate future CBAM costs and require emissions data even if expanded scope takes effect in 2028.
Traceability requirements tied to precursor use
The proposed expansion distinguishes between suppliers treating downstream CBAM mainly as a future cost and those treating it as part of product and supply-chain traceability. For manufacturers exporting metal-intensive goods to the EU, preparing emissions data is described as increasingly important before final legislation takes effect.
The same compliance focus includes documenting precursor use and aligning contractual requirements with emerging CBAM obligations. These steps are linked to how evidence will be used for emissions calculations under the mechanism’s system boundaries. The extent of documentation needs depends on how covered products fall within the expanded scope.