The European automotive industry is proposing to postpone the expansion of the CBAM

The European Automobile Manufacturers’ Association (ACEA) is concerned about proposals to extend the Cross-Border Carbon Adjustment Mechanism (CBAM) to downstream products, due to the risks this poses to the sector. This is stated in the organisation’s statement.

“The course of these discussions, particularly in the European Parliament and the European Council, raises a number of concerns regarding the proposed scope of the extension and the timetable for its implementation,” ACEA noted.

The association’s members have expressed confusion regarding the decisions to include certain automotive products and exclude others. The methodology presented by the European Commission makes sense in theory, but the lack of calculations is causing confusion.

The automotive sector, as an importer of significant quantities of steel and aluminium products, will be significantly affected by the extension of the CBAM to downstream goods.

ACEA therefore insists, in particular, that:

passenger cars remain excluded from the CBAM at this stage, given the significant administrative burden, costs and challenges associated with implementing the reporting requirements,
heavy goods vehicles under CN codes 8701 and 8704 be included in the mechanism due to their more localised supply chain structure and significantly higher use of steel.

The association believes that the functionality of the CBAM should be analysed prior to the planned extension as early as 2028, and recommends postponing this step until 2030. ACEA also advises taking into account the additional pressure caused by the existing shortage of accredited verifiers.

Furthermore, the statement highlights the need to introduce an adjusted ‘de minimis’ principle to alleviate the administrative burden on car manufacturers should the scope of the CBAM be extended. A threshold of one tonne per supplier per reporting period would simplify reporting for large importers.

The Association also warns that extending the CBAM to finished, complex automotive parts would impose a significant financial burden, as many of these contain dozens or hundreds of individual components sourced from extensive supply chains. Fully mapping this supply chain and establishing precise values at each stage would be a complex and burdensome process; therefore, the inclusion of such parts should be limited.

It should be recalled that the European steel industry has called on the EU institutions to preserve the integrity of the Emissions Trading Scheme (ETS) and to strengthen the cross-border carbon adjustment mechanism.