EU automotive sector seeks targeted CBAM scope expansion

• 2028 implementation seen as premature without sufficient assessment
• Wider coverage could increase costs across supply chains

The European Automobile Manufacturers’ Association (ACEA), European Association of Automotive Suppliers (CLEPA) and Tyres Europe have urged EU policymakers to adopt a more limited and proportionate extension of the Carbon Border Adjustment Mechanism (CBAM) to downstream products. They warned that the current proposals could increase costs and administrative requirements across the automotive value chain.

Ahead of the upcoming interinstitutional negotiations on the CBAM scope extension, the associations said they support the mechanism’s goal of preventing carbon leakage. However, they argued that downstream products should be included only where there is a clear and material risk of carbon leakage, and where suitable methodologies, emissions data and verification systems are available.

The associations also said the proposed 2028 implementation date is too early, as more time is needed to assess how the existing CBAM system works before expanding its scope significantly. They noted that the list currently under negotiation covers hundreds of CN codes, which they consider broader than technically necessary. Instead, they called for the expansion to be focused on products facing the highest carbon leakage risks, while covering only the minimum number of relevant precursors needed.

Rising carbon cost raise concerns for downstream manufacturers

ACEA, CLEPA and Tyres Europe also highlighted the rising carbon-related costs already faced by European automotive manufacturers for steel and aluminium. They warned that applying CBAM to downstream products without adequate safeguards could result in carbon costs being applied multiple times along the value chain, potentially shifting carbon leakage risks from upstream producers to downstream manufacturers.

The associations further called for simpler CBAM compliance requirements, including more proportionate default values and easier reporting of primary emissions data. They said automotive importers often operate through long and complex supply chains and may have limited access to actual emissions data from upstream suppliers. As a result, they could be forced to rely heavily on default values.

They also urged the EU to ensure that CBAM default values account for different production routes, particularly for aluminium scrap and post-consumer scrap. According to the associations, using a single default value without distinguishing between primary and secondary production could reduce the attractiveness of recycled materials and ultimately discourage recycling.

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