The EU’s carbon border plan moves towards stricter trade rules.

The Council wants greater product coverage and greater powers against circumvention of regulations before talks with Parliament.

The European Union’s policy on carbon emissions at the border is becoming more demanding after member states backed a negotiating stance to expand the Carbon Border Adjustment Mechanism and close legal loopholes that could weaken the bloc’s climate and industrial standards. This decision triggers discussions with the European Parliament on the extent of the application of carbon costs to imports, without creating unnecessary burdens for companies and trading partners. In the Council Position agreed on 12 June, the CBAM programme would extend certain derivative products made from high-carbon inputs, in particular those using iron, steel and aluminium. It would also strengthen anti-circumvention measures, including rules aimed at preventing companies from avoiding carbon costs by changing the classification, route or production structure of their products. For EU policymakers, this issue is no longer just a climate measure. It has become a test of whether the EU can defend its decarbonisation strategy, while preserving fair competition for European industry, maintaining legal predictability at the border and avoiding a wider trade confrontation with partners who see CBAM as a costly new barrier.

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