The Carbon Border Adjustment Mechanism (CBAM) is a tool that puts a price on certain carbon intensive goods entering the EU in order to encourage climate friendly industrial production. But here’s the problem: the CBAM, as it stands, is full of loopholes. If not fixed, it would undermine decarbonisation investments, accelerate deindustrialisation, favour production in third countries, and fail to cut global emissions.
Fair play for a fair transition
European steel producers are facing increasing carbon costs under the EU Emissions Trading Scheme (ETS), while competitors in third countries have been exempted from any carbon costs. The EU steel industry is leading the transition to green production, but cheap imports risk undermining that effort.
The CBAM can be a game-changer, but only if it’s designed right.
Right now, loopholes allow foreign producers to sidestep carbon costs, shifting emissions elsewhere instead of reducing them. Without fixing these flaws, the CBAM would fail to protect EU industry and could even accelerate deindustrialisation.
CBAM Toolbox: fixing the loopholes to prevent carbon leakage
The CBAM was designed to ensure fair competition and reduce global emissions, but loopholes threaten to undermine its effectiveness. Here’s how we can fix it:
Find out more details in our full fact-sheet available for download below.
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Strasbourg, 07 October 2025 – The new trade measure presented today by the European Commission is a long-awaited proposal to forcefully defend the European steel sector, in full respect of WTO rules, from unfair imports flooding the EU market due to massive global overcapacity. The provisions unveiled by the Commission respond to the needs of the sector and represent a real lifeline for EU steelmakers and steelworkers. The European Parliament and the Council should therefore adopt it as a matter of urgency to enable its entry into force at the beginning of 2026, says the European Steel Association (EUROFER).
Brussels, 01/10/2025
With Europe’s steel industry at breaking point, industriAll Europe and the European Steel Association (EUROFER) held an emergency steel social summit to demand urgent action. Ahead of the announced Commission proposal addressing the impact of global steel excess capacity on the EU steel market, due by mid-October, the European social partners are united in calling for robust and effective trade measures. They also insist on fast and urgent implementation of the EU Steel and Metals Action Plan, especially concerning energy prices and demand. Maintaining the level of political ambition as promised in the EU Steel and Metals Action Plan is essential to restore steel’s competitiveness and save its green transition as well as steelworkers’ jobs across Europe.
Brussels, 19 September 2025 – Following today’s meeting between Commissioner for Trade Maroš Šefčovič and a delegation of European steel CEOs on the global steel crisis and the challenges facing the EU steel industry amid massive decarbonisation investments: