The EU’s Economic and Financial Affairs Council agreed a general approach on 12 June 2026 to strengthen the Carbon Border Adjustment Mechanism (CBAM), the bloc’s instrument for pricing the emissions embedded in imported goods. Meeting in Luxembourg, ministers backed extending the levy to so-called downstream products and adding measures to curb circumvention.
CBAM currently covers basic materials: iron, steel, aluminium, fertilisers, cement and electricity. A Commission proposal from December would broaden it to steel- and aluminium-intensive finished goods. For Finland, that category includes significant imports such as goods vehicles, medical equipment and machine parts. The Council went beyond the Commission’s text, agreeing to roughly double the number of goods covered, which would also bring more importers into the scheme. The general approach additionally extends CBAM to scrap iron and aluminium and revises how emissions from imported electricity are calculated.
Negotiations turned on two points: how far to widen the downstream scope, and how much power to delegate to the Commission to suspend the mechanism temporarily. Finland pressed for thorough impact assessments and objective, quantitative criteria tied to the risk of carbon leakage, and took a critical view of the proposed delegation, warning that temporary exemptions could undermine predictability and investment certainty for clean transition projects. The agreed text includes safeguards limiting when such an exemption could apply.
“Finland considers the Carbon Border Adjustment Mechanism an important instrument for preventing carbon leakage and promoting carbon pricing internationally,” said Sari Multala, Minister of Climate and the Environment, describing the Council position as a compromise between member states’ differing views.
Talks now move to negotiations between the Council, Commission and European Parliament, where the ENVI Committee leads; a vote is provisionally scheduled for September. The outcome matters for Baltic energy-intensive industry and for the investment case behind the region’s clean-energy transition, since CBAM shapes the competitive position of EU producers against higher-emission imports. A separate study by ETLA Economic Research, funded by Finland’s economy ministry and published on 10 June, found that extending CBAM to indirect emissions would reduce carbon-leakage risk while raising import costs.
