When the EU Council approved the position on strengthening the Carbon Border Adjustment Mechanism (CBAM) on June 12, most headlines stopped at the word "expansion." But the essence lies in the details: about 180 goods that were previously untouched by the mechanism could fall under the new regime.
From ingots to refrigerators
From January 1, 2026, CBAM in full mode will charge for carbon footprint on imports of cast iron, steel, cement, fertilizers, aluminum, electricity and hydrogen. However, the European Commission proposed in December 2025 to go further: to include products manufactured from these materials — the so-called downstream goods.
According to Linklaters analysis, the list would include machinery and equipment, automotive components (engines, chassis), household appliances, construction equipment, and certain types of metal scrap. For example, a washing machine that contains about 60% steel and 5% aluminum falls into the proposed list. Passenger cars — not yet.
The logic of expansion is explained clearly: if manufacturers of finished products in third countries do not pay for carbon, they gain a competitive advantage over Europeans, even if the materials themselves are already covered by CBAM. The risk of "carbon leakage" simply shifts to the level below.
Loopholes they want to close
In parallel with the expansion of scope, the Council supported necessary measures. The European Commission's proposal introduces the concept of "abusive practices" — actions that allow avoiding financial obligations under CBAM in violation of regulations. The Commission would have the right to request additional information from importers and promptly add countries to the exceptions list or remove them from it.
"The new structure will expand the scope of CBAM to new products and eliminate loopholes that could be used to circumvent the system."
EU Council Press Service, June 12, 2025
What this means for Ukraine
Ukraine is already under direct pressure from the first wave of CBAM: the mechanism affects approximately 15% of Ukrainian exports to the EU — roughly 3–4 billion dollars annually. According to the Federation of Employers of Ukraine, the GDP decline from CBAM could amount to 8.7 billion dollars in 2026.
In 2024–2025, Kyiv appealed to the European Commission for exemptions or transitional relief — due to destroyed energy infrastructure and limited decarbonization capabilities during the war. The response remained negative.
If the expansion to 180 downstream goods is adopted (planned start — January 1, 2028), the pressure will increase: Ukrainian manufacturers of metal structures, components and machinery will face the same choice — confirm a low carbon footprint or pay additional fees for it.
- Current CBAM (from 2026): steel, aluminum, cement, fertilizers, hydrogen, electricity
- Proposed expansion (from 2028): ~180 finished products made from steel and aluminum
- Anti-avoidance measures: new definition of "abuses," operational powers of the Commission
The expansion is still going through the legislative process — the Council's position is a mandate for negotiations with the European Parliament. If Parliament insists on a faster start or a broader list of goods, Ukrainian metallurgists and machine builders will have less time to adapt than currently provided in the calendar.
