The European Union’s planned expansion of the Carbon Border Adjustment Mechanism (CBAM) in 2028 is expected to focus on downstream steel and aluminium products, but the longer-term scope of the system could extend further across additional industrial sectors.
The proposed downstream extension should be viewed separately from the broader CBAM review required under Article 30 of the regulation, which is examining whether additional EU Emissions Trading System (EU ETS) sectors exposed to carbon leakage could be included in future phases.
Possible future sectors extend beyond metals
The Article 30 review is also assessing potential inclusion of downstream products linked to cement, fertilisers and hydrogen. Refineries and chemicals have been identified as other possible areas for later expansion of CBAM coverage. These potential additions are not included in the current balanced estimate of €4.3 billion to €5.3 billion. Any later inclusion of chemical products, refinery outputs or other process industries could further increase Serbia’s exposure, although the eventual impact would depend on the selected customs codes, exemptions and the treatment of indirect emissions.
CBAM coverage could reach broader manufacturing chains
Based on Serbia’s 2025 trade structure, the country is moving from a CBAM framework currently affecting slightly more than one euro in every eight EU-bound goods towards a possible downstream mechanism covering between one euro in five and one euro in four EU exports.
The expansion would shift the focus of CBAM compliance away from a relatively limited number of electricity producers and primary industrial facilities towards a much wider group of manufacturers integrated into European supply chains. Industries affected could include suppliers connected to European machinery, electrical equipment, automotive production and industrial equipment manufacturing.
Emissions data becomes a key competitiveness factor
The main competitive distinction will increasingly depend on whether exporters can measure, document and verify the embedded emissions associated with their industrial inputs. Companies that can identify and calculate the carbon content of materials used in their products will be better positioned to meet EU customer requirements. Manufacturers without reliable emissions data may face uncertainty over the carbon liabilities attached to their exports. The future impact of CBAM will therefore extend beyond companies directly operating within the initial six covered sectors, creating new compliance requirements for a broader range of Serbian exporters supplying the EU market.
Elevated by CBAM.Clarion.Engineer
