The European Commission unveiled its latest proposals on the Carbon Border Adjustment Mechanism (CBAM), identifying several loopholes that could undermine its effectiveness, including risks linked to EU exports, downstream sectors, and circumvention practices. While welcoming the Commission’s recognition of these weaknesses, the European Steel Association (EUROFER) warned that the proposed measures fall short of delivering a comprehensive and lasting solution to carbon and jobs leakage.

EUROFER Director General Axel Eggert said the proposals represent a necessary first step but remain insufficient to provide the level of protection European steel producers need to remain competitive while transitioning to low-carbon production. He noted that the approach to EU exports lacks a structural solution, with measures limited to two years and covering less than a quarter of steel exports, while funding under the Transitional Decarbonisation Fund remains uncertain.

The Commission also acknowledged circumvention risks such as resource shuffling, but EUROFER said the proposed responses lack clear deterrents. In addition, the limited extension of CBAM to downstream products leaves gaps along the value chain, potentially creating new loopholes.