On 12 June 2026, the Council of the EU agreed its position on measures to strengthen the Carbon Border Adjustment Mechanism (CBAM), the EU instrument designed to tackle carbon leakage and support global decarbonisation. The agreed position aims to make the system more robust before negotiations with the European Parliament begin. The related Council document can be accessed here.

CBAM has been in operation since 1January 2026 and currently applies to imports in the most carbon-intensive sectors, including iron and steel, cement, fertilisers, aluminium, electricity and hydrogen. According to the Council, the current framework focuses mainly on raw materials, which creates a risk that imported downstream goods could undermine EU producers already subject to the EU Emissions Trading System.

The Council’s position therefore proposes to extend CBAM to selected downstream products and to require the Commission to carry out an annual review of additional downstream products that could be included in future. It also supports new anti-circumvention measures, including bringing pre-consumer metal scrap into scope and giving the Commission stronger powers where high-risk deceptive reporting practices are identified.

Another important element concerns serious and unforeseen circumstances that could severely affect the EU internal market. In such cases, the Council wants the exemption mechanism to be more clearly defined and based on objective criteria, including the EU’s exposure to severe price increases. The next step is for the Council Presidency to start negotiations with the European Parliament once Parliament adopts its own position, with the aim of reaching agreement before the end of 2026.