The measures announced on 17 December 2025 clarify CBAM’s rules and procedures and address weaknesses in its initial design. industriAll Europe welcomes these improvements but remains vigilant: industrial workers expect genuine protection, not just a concept.
Why Strong Protection Matters
In a context of asymmetric global climate ambition, with climate backtracking in some major economies and accelerated decarbonisation in the EU, industriAll Europe stresses the need for a robust carbon leakage framework to shield European industry from climate dumping.
CBAM is a key part of this framework, and we welcome:
- Extension of scope to downstream products, closing loopholes that undermined fairness.
- Additional anti-circumvention measures to prevent avoidance tactics.
- Creation of a Decarbonisation Fund to support EU producers competing globally against rivals free from climate constraints.
Our Conditions for Success
For CBAM to succeed, it must demonstrate its effectiveness in real-world conditions before any decision is taken to phase out free allowances. Such decisions must be based on solid evidence, not assumptions. Furthermore, any simplifications or flexibilities introduced—whether through technical adjustments or Free Trade Agreements—must not undermine CBAM’s core purpose of preventing carbon leakage. Finally, revenues generated by CBAM should be used first and foremost to address carbon leakage risks, including funding the mechanism’s implementation and the procedures it requires.
CBAM Is Not and Never Has Been a Silver Bullet
While CBAM is important, it is only one piece of the puzzle for a socially just decarbonisation that avoids accelerating Europe’s de-industrialisation.
It does not address global overcapacity challenges—for example, the persistent oversupply of steel from countries with state-subsidised production continues to distort markets and depress prices. Nor does CBAM guarantee the massive investment needed in zero-emission industrial facilities in Europe; without strong public support and private financing, projects like green hydrogen-based steelmaking risk being delayed or relocated outside the EU. Finally, CBAM does not create lead markets for low-emission goods. Without public procurement policies or incentives for consumers to choose climate-friendly products, European producers investing in decarbonisation will struggle to find demand for their greener goods.
Europe needs a comprehensive industrial strategy to ensure the green transition delivers jobs, competitiveness, and climate ambition.
As industriAll Europe’s General Secretary Judith Kirton-Darling states, "If Europe wants to decarbonise without offshoring emissions, we need strong protection against climate dumping—both on European and global markets. The announced measures strengthen CBAM. Extending the scope is welcome: having a carbon price on a ton of steel but none on a product made from that steel was pure nonsense. Likewise, the fund to support EU companies competing abroad against climate-free rivals is a positive step. But CBAM is a first-of-its-kind mechanism. Dismantling existing carbon leakage protections can only happen if CBAM works in reality. And CBAM alone is not enough: Europe must invest in green industrial transformation and create markets for zero-emission products."
Background
• CBAM applies to importers a carbon price equivalent to that paid by EU producers under the ETS.
• Initially covering six sectors—iron and steel, aluminium, cement, electricity, hydrogen, and fertilizers—CBAM will expand its scope in the definitive regime starting 1 January 2026.
• The latest package aims to fix design flaws and adopt technical legislation for full implementation.