ENVI Adopts Position on CBAM Extension: 457 CN Codes and No Escape Clause

A Broad Majority for a Stronger CBAM

On 6 July 2026, the European Parliament's Environment Committee (ENVI) adopted its position on the planned CBAM extension. A broad majority from The Left to the EPP backs the compromise negotiated by rapporteur Mohammed Chahim. The position tightens the Commission's December 2025 proposal in several places, above all on scope. For importers of downstream steel and aluminium products, what lies ahead is now considerably more concrete.

The Scope Grows to 457 CN Codes

In December 2025, the Commission proposed adding around 180 downstream product categories to CBAM, covering steel- and aluminium-intensive goods such as engines, washing machines and refrigerators. The ENVI Committee goes further. It lowers the emissions threshold for including a product category from 150 to 50 kilotonnes of CO2 equivalent. The list of additional product categories grows from 180 to 277 CN codes as a result. In total, CBAM would cover 457 CN codes and capture a significantly larger share of embedded emissions. For many mid-sized importers who were previously unaffected, the CBAM obligation would no longer start at crude steel but at the finished product. Companies should check their import portfolio against the extended list now, not once the legislative process has concluded.

No Escape Hatch: Article 27a Is Deleted

The controversial Article 27a would have allowed the Commission to suspend CBAM for individual products, possibly even retroactively. Associations from the hydrogen, ammonia, fertiliser and industrial gases sectors had warned the Committee in a joint letter of investment uncertainty running into the billions. The ENVI Committee now deletes the clause entirely. In its place comes a compensation mechanism. In the event of severe disruption to the internal market, CBAM revenues can be redirected to affected sectors without suspending the mechanism itself. Anyone investing in low-carbon production or pricing long-term supply contracts gains planning certainty. The CBAM cost line remains in place and is no longer qualified by an emergency brake that could be pulled at any time.

International Credits Stay Out

The option to use international carbon credits for CBAM compliance is deleted. The Committee considers the discussion premature as long as significant doubts about the climate integrity of these credits remain. For importers, this means CBAM costs cannot be reduced through cheap credits from third countries. What counts remains the actual embedded emissions of the goods and the price of CBAM certificates. The most effective lever for reducing costs therefore remains sourcing lower-emission input materials and obtaining robust emissions data from suppliers.

Default Values as Leverage Against Circumvention

The Committee tightens the rules against abusive practices. Imports from countries classified as presenting a high risk of circumvention will automatically be subject to default values. Operators can only avoid this by demonstrating that they are not engaging in circumvention practices. The burden of proof is reversed. Since default values are deliberately set conservatively, circumvention via third countries becomes economically unattractive. Importers with supply chains running through transshipment countries should check whether their goods flows could fall within this framework and document their proof of origin accordingly.

Distance Sales: E-Commerce Falls Under CBAM

Newly added is the inclusion of importers of distance sales. E-commerce platforms are thereby also covered by CBAM when goods are sold directly to end customers in the EU. The Committee closes a gap through which CBAM-liable goods could previously enter the internal market past the mechanism. For platform operators and traders with direct-import models, this creates a new compliance layer that existing CBAM processes often do not account for.

Technical Support for Ukraine

The Committee provides for stronger technical support for Ukraine to facilitate CBAM implementation and compliance. An exemption from the mechanism, as Ukrainian business associations had demanded, remains off the table. In addition, reporting obligations for the least developed countries are to be simplified. Anyone importing from Ukraine should continue to plan for full CBAM obligations, but can expect better data availability on the supplier side.

Outlook

The plenary vote in the European Parliament is scheduled for September 2026. The Council already adopted its general approach on 12 June 2026, so trilogue negotiations can begin immediately after the plenary. The aim is to conclude negotiations before the end of the year, meaning the extended rules could be finalised within a few months.

Support

If you would like to understand how the planned extension could affect your CBAM obligations, for instance whether your imports fall under the 457 CN codes or what the new anti-circumvention rules mean for your supply chain, please get in touch at helge@kolum.earth.