As of January 1, the European Union’s Carbon Border Adjustment Mechanism (CBAM) has entered full implementation. Companies in the European Union that import goods in sectors covered by the mechanism (iron/steel, aluminum, cement, fertilizers, electricity, and hydrogen) will be required to purchase corresponding certificates for embedded emissions, calculated based on the carbon price paid by European producers under the EU Emissions Trading System (EU ETS).
Although there was a partial relaxation of the rules in 2025 to ease the burden on small importers, the latest amendments adopted in December announce a significant expansion of CBAM—to as many as 180 additional products, according to the latest edition of Macroeconomic Analyses and Trends (MAT).
Although in October 2025 the EU raised the weight threshold to 50 tonnes of imported goods—thereby exempting 90% of importers (mostly small and medium-sized enterprises and individuals) from the obligation and simplifying the rules for declarants, emissions calculation, and reporting—new CBAM rules introduced in December 2025 предусматривают an expansion to 180 products and the introduction of stricter measures for the application of CBAM,” notes Sanja Filipović in a MAT analysis.
These changes, which the EU sees as a key instrument of its climate policy, are already causing concern among trading partners and are setting new rules of the game for companies seeking access to the European market.
Specifically, on December 17 the European Commission published a draft amendment to the CBAM Regulation (2023/956) aimed at expanding its scope to additional products containing a high share of steel and aluminum (so-called “downstream” products) and introducing further measures to ensure consistent implementation of the mechanism.
The announced amendments still need to go through the regular legislative procedure before being adopted, and their application is expected to begin on January 1, 2028.
While the goal of CBAM is to prevent carbon leakage, its implementation increases production costs for EU manufacturers that use materials subject to CBAM taxation (steel and aluminum), according to the MAT analyst.
To prevent the relocation of production to countries with less stringent decarbonization regulations, the European Commission plans to expand the scope of CBAM to 180 products with a high share of steel and aluminum content (on average 79%), such as various types of machinery and equipment (engines, pumps, burners, refrigerators and freezers, industrial robots, cranes, hoists, elevators, agricultural and household machines, etc.), vehicles, medical products, metal furniture, rails, and more.
These are primarily specialized equipment and industrial products used in heavy industry (94%), while only six percent of the listed products are used in households.
In response to objections from domestic companies, the European Commission has предусмотрела the establishment of a fund to provide temporary support to EU manufacturers that may become less price-competitive in third-country markets, where their products could be replaced by cheaper goods with higher emissions.
Accordingly, companies that provide evidence of decarbonization will be able to expect compensation for part of their costs through the EU ETS system. Funding will be provided by the Member States, with 25% of revenues from the sale of CBAM certificates in 2026 and 2027, while the remaining 75% will constitute the EU’s own resources.
To facilitate business operations for domestic companies, the Commission has also предусмотрела simplifications through the introduction of an equivalence mechanism for deductions based on carbon taxes and carbon prices, as well as a new legal basis for negotiated trade facilitation measures, such as mutual recognition of accredited verification bodies and equivalent carbon pricing systems.
Stricter measures against circumvention of obligations
The new amendments introduce stricter reporting requirements and grant broader powers to the European Commission in combating abuses aimed at avoiding CBAM financial obligations. The European Commission may request additional evidence when actual values are deemed unreliable and, in such cases, may apply default values for a specific country. In addition, the European Commission and the competent authority may require proof from the authorized CBAM declarant that the imported goods were produced at the declared installation and during the declared production period.
Not only do the amendments provide additional measures to prevent the circumvention of CBAM implementation, they also promote the use of scrap in order to reduce emissions in energy-intensive products.
A key novelty is that steel and aluminum scrap from the production process is now included in the calculation of CBAM obligations, ensuring fair carbon pricing for goods produced in the EU as well as for imported goods. Likewise, changes are envisaged to the methodology for calculating emission factors for imported electricity, so that electricity generated from all sources is now covered, including non-fossil sources.
“In this way, following consultations with stakeholders, CBAM is entering a new phase in which, after the reporting phase, it evolves into a market-shaping mechanism. As the amendments to the CBAM Regulation imply an expansion to products with a higher level of processing and enhanced oversight of supply chains, it is clear that companies wishing to export to the EU market can no longer rely on partial processing, product reclassification, or limited emissions data to reduce their exposure to CBAM,” Sanja Filipović points out.
Therefore, it is necessary not only to achieve a high level of alignment with EU regulations, but also to ensure verifiable emissions accounting across the entire production process, including the use of scrap and input raw materials.
“This is an important message for companies in Serbia that export to the EU, as it is clear that CBAM has become a new reality and a prerequisite for access to the EU market. Viewed from a more optimistic perspective, these guidelines may help introduce system-level solutions in Serbia that are aligned with the principles of the circular economy and environmental protection,” the MAT analyst concludes.
CBAM revenues could reach €2.1 billion by 2030
According to some estimates, CBAM-related revenues could reach around €2.1 billion by 2030, as the scope of products and sectors expands and payment obligations increase. At the same time, many of the EU’s trading partners have expressed concern about the implications of CBAM for global trade, viewing it as a protectionist measure.
Within the structure of total EU goods imports, CBAM-covered goods account for about four percent. Iron and steel alone represent as much as 66 percent of the total value of goods subject to CBAM, followed by aluminum with a 24 percent share, fertilizers with five percent, electricity with four percent, while cement accounts for just one percent.
Source: Biznis.rs