EU expands carbon border tax to involve auto parts, washing machines

(MENAFN) The European Union is broadening its Carbon Border Adjustment Mechanism (CBAM) to cover imports of high-emission goods such as auto parts and washing machines, as announced by the European Commission on Wednesday. The move aims to strengthen efforts to combat climate change and prevent circumvention of the carbon pricing system.

Starting Jan. 1, the CBAM will apply to roughly 180 steel- and aluminum-intensive products, including items used in construction, heavy machinery, and household appliances. The expansion targets goods further along the production chain, requiring importers to account for embedded emissions in materials like steel, aluminum, cement, fertilizers, hydrogen, and electricity.

Under the updated rules, imports with underreported emissions will face higher carbon charges, and importers must provide detailed production data. Previously, only volumes and emissions were reported, but the new full regime requires the purchase of CBAM certificates corresponding to emissions.

The expansion has drawn criticism from global trade partners. The United States argued the measure could act as a trade barrier and strain transatlantic relations, while China called it protectionist, warning it may hurt developing economies and reduce the competitiveness of Chinese steel in Europe.

European manufacturers, particularly in the automotive sector, have welcomed the expansion, saying it levels the playing field by protecting low-carbon domestic products from cheaper, high-emission imports. The European Commission plans to allocate 25% of CBAM revenues between 2028 and 2029 to support EU companies investing in low-carbon technologies, reinforcing the bloc’s green industrial strategy.

MENAFN18122025000045017640ID1110496528