The European Commission is seeking public opinions on expanding its Carbon Border Adjustment Mechanism (CBAM) to include downstream products, aiming to prevent carbon leakage where production moves to regions with lower carbon costs. The consultation, open until August 26, also explores measures to counter circumvention of CBAM payments.

In a separate move, the Commission plans to propose a scheme to reimburse EU exporters for CO2 payments made within the EU. Expected this year, the scheme would use CBAM import revenues to fund an estimated EUR 70 million in compensation for EU exporters in 2026. This proposal faces scrutiny under World Trade Organization (WTO) rules.