The European Parliament's Environment Committee (ENVI) adopted its position on the CBAM scope-extension and anti-circumvention proposal on July 6, 2026, by 56 votes to 11 with 12 abstentions. The vote commits Parliament's negotiators to extending the Carbon Border Adjustment Mechanism to roughly 180 categories of downstream steel- and aluminium-intensive products, more than 400 CN codes covering fasteners, wire, springs, machinery, vehicle components, and household articles, with coverage proposed to start in 2028.
The committee also toughened the anti-circumvention rules, deleted the Commission's proposed "emergency brake" suspension clause, and brought the Temporary Decarbonisation Fund forward to 2027. For importers of finished metal goods that have never touched CBAM, this is the vote that turns the Commission's December proposal (COM(2025)989) into a concrete legislative trajectory. "This compromise makes the CBAM stronger, fairer and more resilient," rapporteur Mohammed Chahim said in Parliament's press release.
What the ENVI committee voted for
The ENVI position backs the Commission's downstream scope extension and strengthens it with four additions: anti-circumvention rules covering "slight processing" and online sales, Commission power to apply default values of the true country of origin, deletion of the Article 27a emergency brake, and an earlier, broader Temporary Decarbonisation Fund. The position is a negotiating mandate, not adopted law. Every element remains subject to the September plenary vote and to trilogues with the Council.
The adopted text contains five headline elements:
- Extension of CBAM to downstream steel- and aluminium-intensive products, roughly 180 categories and 400+ CN codes, selected through transparent, quantitative methodologies
- Anti-circumvention rules extended from "slightly modified" goods to slight processing, plus new obligations for online sales
- Deletion of the Commission's Article 27a emergency brake, replaced by a mechanism that redirects CBAM revenues to sectors hit by severe market disruption
- A Temporary Decarbonisation Fund running 2027-2029, one year earlier than the Commission proposed, open to all downstream operators using CBAM goods
- Simplified reporting for least-developed countries together with a technical assistance framework
Two elements did not make the final text. SteelOrbis reported that the committee rejected the use of Article 6 Paris Agreement carbon credits as CBAM offsets, and no Ukraine-specific exemption was included, despite pre-vote drafts reported by Eurometal that had floated default-value flexibility for candidate countries facing security situations.
Downstream expansion: fasteners, wire, springs, and machinery from 2028
The ENVI position confirms Parliament's support for pulling downstream products into CBAM from January 1, 2028, the application date proposed in COM(2025)989. Importers of fasteners, screws, bolts, wire, springs, machinery parts, vehicle components, domestic appliances, and household articles face certificate obligations for the first time if the extension is adopted.
The category count moved during the drafting. Eurometal reported on July 3 that pre-vote compromise amendments proposed expanding coverage from the Commission's roughly 180 categories to 277 categories and lowering the emissions threshold for adding products from 150 to 50 kilotonnes of CO2 equivalent. Trade press puts the adopted list at approximately 457 products, against roughly 180 in the Commission proposal and roughly 200 in the Council's general approach, and the final product list is one of the numbers trilogues will settle. The CBAM downstream expansion page compares the Commission, Council, and Parliament positions in detail, and the downstream product list tracks which CN codes each of the three proposals covers. Importers can check individual codes against current scope with the CN code lookup tool.
Tougher anti-circumvention: slight processing, online sales, default values
MEPs extended the prohibition on circumvention from "slightly modified" goods to cover slight processing, and gave the Commission the power to apply default values of the true country of origin where circumvention patterns are detected. The committee framed the rules as targeting only arrangements set up purely to dodge CBAM, not legitimate supply chain restructuring.
Online sales get their own regime. According to Parliament's press release, the position applies a single weight-based limit to a seller's shipments collectively rather than parcel by parcel, adds new reporting duties for online sales, and creates retroactive liability for split shipments. That closes the route of breaking consignments into small parcels to stay under the 50-tonne de minimis threshold introduced by Regulation (EU) 2025/2083. The current rules on resource shuffling, minimal transformation, and origin manipulation are set out in the CBAM anti-circumvention rules guide.
Emergency brake deleted, decarbonisation fund brought forward
The committee deleted the Commission's Article 27a "emergency brake", which would have allowed temporary suspension of CBAM for products facing severe market disruption, and replaced it with a mechanism that redirects CBAM revenues to the affected sectors. Parliament's negotiators opted for compensation over suspension: if severe disruption hits the internal market, CBAM revenues would be redirected to aid the affected sectors while certificate obligations continue.
The companion report on the Temporary Decarbonisation Fund passed by 59 votes to 16 with 6 abstentions, with Pascal Canfin as rapporteur. The fund starts in 2027 rather than the Commission's proposed 2028, runs to 2029, and is open to all downstream operators using CBAM goods. ESG Today reported that the committee also extended the fund to fertiliser producers and users, covering urea, ammonium nitrate, and ammonium sulphate. Leftover revenues would flow to international climate finance under the Paris Agreement rather than back to member states, according to Parliament's press release. How the fund distributes CBAM revenues from 2027 is covered in the Temporary Decarbonisation Fund guide.
The table below summarises how the ENVI position changes the Commission's December 2025 proposal.
| Element | Commission proposal (COM(2025)989) | ENVI position (July 6, 2026) |
|---|---|---|
| Downstream scope | ~180 downstream products | Backed and widened to 400+ CN codes (~457 products per trade press); pre-vote amendments floated 277 categories |
| Application date | January 1, 2028 (proposed) | Unchanged; trade press still reports a 2028 start |
| Emissions threshold for adding products | 150 kilotonnes CO2e | Pre-vote amendments proposed 50 kilotonnes CO2e |
| Emergency brake (Article 27a) | Suspension clause for severe market disruption | Deleted; CBAM revenues redirected to affected sectors |
| Temporary Decarbonisation Fund | From 2028 | Brought forward to 2027-2029; all downstream operators plus fertiliser producers and users |
| Anti-circumvention | Prohibition on slightly modified goods | Extended to slight processing and online sales; default values of true country of origin |
Industry reaction: "cost wave" warnings for SMEs
Steel distribution commentary warned that the expansion is a "cost wave" that will hit SMEs and consumers through everyday products such as cars, washing machines, refrigerators, and building materials. Steelnews.biz wrote that imported everyday goods will systematically become more expensive and that SMEs dependent on imported inputs or capital goods face more bureaucracy, higher procurement costs, and declining competitiveness.
The automotive sector is pushing back hardest. The European Automobile Manufacturers' Association (ACEA) called the expansion plan technically flawed, wants passenger cars excluded and implementation postponed to 2030 at the earliest, and warned of a serious shortage of accredited verifiers. The full spread of positions, from steelmakers demanding more coverage to aluminium processors requesting a pause, is mapped in our overview of industry battle lines before the September plenary.
What happens next: September plenary, then trilogues
Parliament is set to confirm the negotiating mandate at the September 2026 plenary session, after which trilogues begin with the Council, which agreed its own position on June 12. Three dates now frame the file:
- September 2026: plenary vote on the mandate, where amendments can still reopen the committee text
- Autumn and winter 2026: trilogue negotiations between Parliament, Council, and Commission on category counts, thresholds, the fund, and the deleted brake
- January 1, 2028: proposed start of downstream coverage, if the co-legislators reach agreement in time
The trilogues will not happen in isolation. The Commission's tabled ETS Phase 5 revision, which would return 15 percent free allocation in 2028 and slow the CBAM phase-in, directly interacts with how fast downstream coverage can bite. Every confirmed date from the 2023 transitional period through the 2034 free allocation phase-out is tracked in the CBAM timeline.