EU moves to expand carbon border levy to shut loopholes in polluting imports

Mace | 19th December 2025 | Brussels, Uncategorised

Photo_of_Espanya_Industrial_factory,_Sants,_Barcelona,_about_1870

Brussels plans to widen its carbon border levy, targeting downstream goods and loopholes to prevent carbon leakage and protect EU industry

Brussels is preparing to widen the scope of its carbon border levy as the European Union moves to shut loopholes that officials say allow polluting goods to slip through the net. The European Commission is drafting changes to the Carbon Border Adjustment Mechanism that would extend coverage beyond basic materials such as steel, aluminium and cement to include selected manufactured products that contain large amounts of those inputs. The move is driven by concern that companies can currently avoid the levy by relocating carbon intensive stages of production outside the bloc, while continuing to sell finished or semi finished goods into the EU. With the definitive phase of the mechanism set to start in 2026, pressure is mounting to ensure the system delivers on its promise to prevent carbon leakage as free allowances under the EU emissions trading system are gradually withdrawn. The planned expansion would pull more downstream products into the scheme, targeting goods where embedded emis...

Subscribe to The Mace

Join the member community shaping British politics and stay ahead of what's really happening in the world of politics and public affairs, with expert analysis, breaking news, and insider insights from Westminster and Brussels. The Mace is the leading news source and resource for the government affairs industry, offering required reading and lobby intelligence for professionals.

To see what you are missing out on by not subscribing to The Mace, click here to download our full membership info-pack. This includes having no paywall on op-ed content or profiles/interviews, allowing professional profiles to be read with maximum impact and visibility by government, special advisers, MPs, peers, civil servants, and policy and political decision-makers.