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ARTICLE · 13 JULY 2026

CBAM Expansion Poised To Impact Global Supply Chains

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Since 1 January 2026, the EU Carbon Border Adjustment Mechanism (CBAM) has placed a price on carbon emitted during production of goods imported by the EU in the most carbon-intensive sectors: iron and steel, cement, fertilisers, aluminium, electricity and hydrogen.

GlobalInternational Law
Jan Walter
Jan Walter
Kenneth J. Markowitz
Kenneth J. Markowitz
Stacey H. Mitchell
Stacey H. Mitchell
Christopher Treanor
Christopher Treanor
Alan Yanovich
Alan Yanovich
Hannes Sigurgeirsson
Hannes Sigurgeirsson
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Since 1 January 2026, the EU Carbon Border Adjustment Mechanism (CBAM) has placed a price on carbon emitted during production of goods imported by the EU in the most carbon-intensive sectors: iron and steel, cement, fertilisers, aluminium, electricity and hydrogen.

The European Parliament and the Council discussions around the expansion of the CBAM product scope and other revisions to the regulation have intensified recently. The Commission published legislative proposals in December 2025 to (1) cover downstream products, (2) introduce anti-circumvention measures and (3) launch a fund to temporarily support EU producers of CBAM goods and mitigate carbon leakage risk (the Temporary Decarbonisation Fund). As discussed below, the Council adopted its position in June, and the relevant European Parliament committee has passed an indicative vote setting out its position that will be voted on by the full plenary in September, allowing the process to move to final negotiations and approval.

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