The European Commission has proposed extending the Carbon Border Adjustment Mechanism (CBAM) to 180 additional steel- and aluminium-intensive downstream goods from 1 January 2028. The Council’s position in June 2026 covered about 200 additional products, while the European Parliament’s position in September 2026 proposed a broader list of 457 products. As of 20 October 2026, negotiations on the final legislation were still ongoing.
The extension is aimed at addressing a carbon-leakage route in which production shifts outside the EU while finished goods containing steel or aluminium enter the EU without an equivalent carbon adjustment. Coverage of downstream products is intended to reduce incentives linked to that pattern of trade.
Equipment procurement and embedded emissions under expanded CBAM scope
For mining, refining and materials-processing projects, the potential impact extends beyond the sale of project output to the cost of acquiring equipment needed to develop and run industrial facilities. Mining operations use steel-intensive infrastructure such as crushers, mills, conveyors, screens, pumps and tanks, alongside structural steelwork, piping and electrical enclosures. Refineries and smelters also rely on furnaces, cooling systems, pressure equipment, burners, ducting, materials-handling installations and specialised machinery.
European projects often purchase substantial volumes of this equipment from international manufacturing centres including China, Turkey and India. Procurement comparisons typically include purchase prices, performance guarantees, freight terms, installation support, spare-parts availability and financing conditions. A downstream CBAM expansion could add another variable by bringing embedded emissions associated with steel and aluminium contained in imported equipment into the cost assessment where relevant products fall within scope.
The effect depends on the final product list and the calculation methodology adopted. Not every mining machine or equipment package is expected to be covered automatically, and the final legislation may differ from the Commission’s original proposal. Project developers are therefore not able to treat any additional CBAM-related costs for 2028 as settled before legislation is adopted, even though import-cost changes may still influence procurement decisions made earlier.
Project timelines affect when CBAM costs could enter capital planning
Mining and metallurgical projects commonly run on development cycles of five to ten years. Equipment specifications, tendering and purchasing decisions often occur well before commissioning. A project reaching financial close in 2027 could procure major equipment in 2028 or 2029, placing purchases within the timeframe of the proposed extension.
Capital expenditure models for long-running projects may need to reflect regulatory uncertainty while the scope remains under negotiation. One potential outcome described in relation to supplier selection is a shift in supplier rankings if imported equipment quoted at a low initial price contains substantial quantities of carbon-intensive steel. If such equipment falls within the final CBAM scope, its carbon-adjusted landed cost could exceed the original quotation.
Suppliers using lower-carbon materials could become more competitive once any additional border-related cost is considered. The size of any price difference would depend on which equipment is covered, its material composition and how emissions are calculated under the final rules.
Contracting for customs classification and emissions data across EPC supply chains
The proposed CBAM expansion could also affect contractual arrangements involving project owners, engineering procurement and construction (EPC) contractors, original equipment manufacturers (OEMs), customs representatives and emissions verifiers. Major equipment purchase agreements and EPC contracts may require explicit provisions covering customs classification, emissions documentation, verification processes and how costs are allocated if CBAM legislation changes.
Where the project company is the importer of record, it would carry direct obligations tied to import procedures while relying on an OEM to provide emissions information about steel and aluminium used in equipment. The source data needed for that purpose may not be fully collected by manufacturers under current practices. This creates an interface risk where the party responsible for meeting regulatory obligations may not control underlying production information required to substantiate relevant emissions.
Contracts would therefore need to define who provides data, which methodologies apply, how information is verified and how additional costs are handled if documentation is insufficient or regulatory requirements change.
Documentation requirements may affect customs clearance timing
Documentation linked to expanded coverage could also influence construction and commissioning schedules. Depending on final rules, incomplete emissions information could delay customs clearance or lead to reliance on default values. For projects dependent on timely arrival of large mills, transformers, furnaces or process modules, customs and emissions documentation could become part of the critical path alongside manufacturing, shipping, installation and commissioning.
If delivery schedules slip, commercial consequences would extend beyond any direct carbon-related charge associated with imports. Project developers would need to coordinate preparation of emissions records with manufacturing schedules and contractual delivery milestones. This shifts attention toward obtaining supplier data before shipment rather than after equipment reaches the EU border.
Financing structures may require contingency for imported machinery costs
Project financing already addresses uncertainties involving steel prices, freight costs and foreign-exchange movements. If downstream CBAM coverage expands as proposed, financial models may also need a separate contingency for potential costs tied to imported equipment. The exposure could be more significant for projects with a high share of imported machinery and limited financial flexibility.
Unexpected cost changes could affect project budgets and debt-service coverage depending on the size of an equipment package and how final regulatory treatment applies.
OEMs face new requirements for embedded material emissions evidence
The potential extension would affect machinery manufacturers supplying products into Europe. OEMs may need to identify origin details and carbon intensity for steel plate, castings, aluminium components and other covered inputs incorporated into their products. This differs from calculating a manufacturer’s own factory emissions or electricity footprint because it concerns embedded emissions associated with materials used in equipment.
Chinese machinery suppliers could face particular scrutiny because their offerings are often competitive on price and financing terms while carbon intensity for underlying steel and aluminium can vary substantially. Manufacturers able to use lower-carbon metals and document supply chains could be better positioned than competitors that cannot substantiate input emissions evidence.
European equipment manufacturers could also benefit if expanded coverage reduces price advantages linked to carbon-intensive imports. Competition could occur through lifecycle services, proximity to customers, spare-parts availability, digital integration and lower-carbon material inputs. The measure would not remove differences in productivity or high energy costs because its stated purpose is adjusting for carbon-related border costs rather than providing general subsidy support.
Expanded coverage may extend documentation needs beyond raw metals trade
The implications are not limited to EU-based mining projects importing equipment. Mining companies and manufacturers outside the EU could face additional documentation requirements if they export equipment-intensive finished goods into Europe or if their downstream products become covered under an expanded mechanism. The change would therefore extend CBAM relevance further into industrial value chains beyond direct trade in raw materials and basic metals.
For project owners, engineers, EPC managers and lenders involved in procurement planning across regions including Serbia’s wider industrial context as part of Southeast Europe’s supply links described through international sourcing patterns in China, Turkey and India, an immediate task involves screening equipment registers for potentially covered goods. Such screening can identify supplier country details, metal content within equipment packages, importer-of-record status, availability of emissions evidence and contractual allocation arrangements for regulatory responsibilities.
This screening approach does not require certainty about the final product list for 2028 because purchase orders and supplier agreements can still be adjusted during ongoing negotiations. Steel prices have long been a major variable in mining capital expenditure; under a downstream CBAM extension proposal discussed here, emissions intensity of steel used in imported equipment could become an additional factor in procurement and project-cost calculations where coverage applies within the final rules.