Parliament Strengthens CBAM: The Chahim Draft Report

Background: What is this about?

On 10 April 2026, MEP Mohammed Chahim, rapporteur of the European Parliament's ENVI Committee, published his draft report on the Commission proposal COM(2025)0989. This proposal, put forward by the Commission in December 2025, seeks to extend the scope of CBAM from 1 January 2028 to 180 steel- and aluminium-intensive downstream products, and to introduce additional measures against circumvention practices. The draft report is the European Parliament's first step in the ordinary legislative procedure. It is not yet binding, but it clearly signals the direction the Parliament intends to take, and the signal is significant.

No emergency exit: Article 27a is deleted

The most substantive intervention concerns Article 27a of the Commission proposal. This provision would have allowed the Commission to remove goods from the CBAM scope via delegated act in crisis situations, where their inclusion was causing severe harm to the EU internal market. Chahim deletes this provision entirely.

In its place, he introduces Recital 36a as an alternative: the Commission should regularly reassess the situation and, where appropriate, submit a legislative proposal providing for provisional measures. This explicitly covers the context of prolonged military conflict and its impact on affected regions, a clear reference to Ukraine. The crucial difference lies in the procedure: any such proposal would go through the ordinary legislative procedure with full parliamentary involvement, rather than being implemented by unilateral executive act.

The rapporteur argues that the product scope of CBAM is a core element of the regulation and should not be left to the Commission's discretion. He sees in the original wording a risk that sectoral interests could generate political pressure to push specific goods out of scope. Article 28a, which had provided for an urgency procedure for delegated acts, is also deleted.

No Article 6 carbon credits

A further substantive intervention concerns the question of international carbon credits. The Commission had indicated in Recital 21 that carbon credits under Article 6 of the Paris Agreement could be taken into account when offsetting carbon prices already paid in third countries. Chahim deletes this recital and the corresponding legal basis entirely.

The reasoning is straightforward: Article 6 carbon credits remain characterised by significant price volatility and variable environmental integrity, an assessment recently confirmed by the European Scientific Advisory Board on Climate Change. For importers, this means that CBAM compliance through the acquisition of international carbon credits is, based on the current state of the parliamentary procedure, ruled out. Those who had been counting on this option should adjust their planning accordingly.

One nuance worth noting: Chahim does not close the door entirely for all future scenarios. A new recital acknowledges that carbon pricing mechanisms in Least Developed Countries could potentially play a role, but only following a thorough Commission assessment of data quality, environmental integrity, and risks. This is not a blank cheque, but a mandate to investigate.

Indirect emissions: extension to further sectors

Particularly far-reaching is Chahim's position on indirect emissions, that is, emissions arising from the consumption of purchased electricity, heat, and steam in the production process. Currently, indirect emissions are already foreseen under CBAM for fertilisers and cement. Chahim now calls for this coverage to be progressively extended to further sectors, with the goal of establishing a coherent EU-wide carbon pricing framework.

At the same time, he takes aim at national compensation schemes for indirect ETS costs. These measures vary considerably between Member States and thereby undermine equal competitive conditions. The Commission should therefore present technical and policy options by the end of 2027, including a gradual phase-in of indirect emissions across sectors and a coordinated phase-out of compensation measures. For energy-intensive companies that have so far benefited from such national compensation, this is a development worth watching closely. ###Future sectors: chemicals, polymers, and scrap Chahim explicitly regards CBAM as an evolving instrument. A new recital records that the Commission's analysis during the transitional phase identified chemicals, polymers, and selected scrap materials from the pulp, paper, and glass industries as technically feasible candidates for future inclusion. The approach should be gradual, starting with products with simpler value chains or already established EU ETS benchmarks. For companies in these sectors, this is a first clear signal that CBAM obligations may well apply to them in the future. ###Anti-circumvention: clarifications, but no major overhaul The draft report also contains adjustments to the provisions on abusive practices. The definition is sharpened: abusive practices now explicitly include the deliberate under-declaration of actual emission values. The parameters by which the Commission identifies risks are made more transparent, and any additional reporting obligations are to be time-limited and proportionate. These are refinements to the existing framework rather than a fundamental strengthening of enforcement mechanisms.

Other practical clarifications

Two further practical clarifications are worth noting. First, the Commission should publish default values for the new downstream products in good time before their application, based on transparent and robust methodologies. Second, the term "pre-consumer scrap" receives its own legal definition, and importers wishing to declare scrap as "post-consumer" will explicitly bear the burden of proof.

Assessment: What does this mean for companies?

First, some context: the Chahim draft report is an opening document. It must still be debated in the ENVI Committee and voted on in plenary before trilogue negotiations with the Council can begin. The final legal position may still differ considerably from this draft.

That said, the direction of travel is worth taking seriously. Parliament is sending a consistent signal that CBAM is to become more robust and broader in scope. Potential weaknesses are being closed off, new sectors are coming into view, and the dismantling of national compensation measures for indirect ETS costs is on the agenda. Companies in the chemicals and polymer industries, as well as energy-intensive sectors with significant purchased energy consumption, would do well to assess their CBAM exposure today, including for areas not yet covered by the regulation.

Outlook

The Chahim draft report marks the beginning of a parliamentary debate aimed at further developing and reinforcing CBAM, with more sectors, more emission types, and fewer political safety valves. The further course of the legislative procedure, in particular the Council's position and the subsequent trilogue negotiations, will be decisive. We will continue to monitor these developments for you.

Support

If you would like to understand how the developments outlined in the draft report could affect your CBAM strategy, whether through the 2028 downstream expansion, a potential inclusion of chemicals, or the extension to indirect emissions, please feel free to reach out at helge@kolum.earth.