The European Commission has proposed extending the Carbon Border Adjustment Mechanism (CBAM) to downstream products containing significant steel or aluminium content starting in 2028. The initial proposal would cover 180 product categories. The European Parliament supports a wider scope, while the Council has put forward its own adjustments. As of 12 October 2026, the additions remain under negotiation and are not current import obligations.
Downstream products with steel or aluminium content
The proposed changes would broaden carbon-related considerations beyond commodities already covered under CBAM for steel and aluminium. Selected finished products would be brought into scope under the Commission’s plan. The legislative process is still ongoing, with different positions reflected across EU institutions. This means the final coverage and timing depend on negotiations in Brussels.
Supply chains serving Germany and Italy
Potential effects are expected to be concentrated in supply chains linked to Germany, Italy and other EU manufacturing centres. Turkish firms supply metal mountings, fabricated products, engineering components and machinery-related goods that may include steel or aluminium made at separate industrial installations. Under an expanded framework, importers could face requirements to connect the finished component with its metal precursors and the relevant manufacturing processes. Importers would also need to align that information with what is provided to the final EU customer.
Türkiye’s export operations benefit from relatively short freight times to European markets, established customer relationships, production flexibility and the ability to customise products. At the same time, pressure has already been present in basic steel competitiveness. EUROFER recorded a 16% year-on-year decline in Turkish finished-steel shipments in the first half of 2026. Despite the decline, Türkiye remained the EU’s largest supplier by volume share, accounting for 15.7% of finished-steel imports.
Why emissions data may need to be supplier-specific
A single national emissions factor would not provide a reliable basis for assessing potential carbon exposure across Turkish manufacturers. Steel output can follow different furnace routes, while aluminium production can involve primary or secondary processes that yield different emissions profiles. In addition, a fabricator’s own electricity consumption does not fully capture embedded emissions of the metal it purchases. Under expanded rules, installation information and precursor data would need documentation aligned with methods that ultimately apply.
For Turkish exporters, access to upstream production records could become part of maintaining European customer relationships as buyer requirements evolve. Companies able to identify material origins and provide reliable emissions information may be better placed to respond to requests during ongoing negotiations. This emphasis on upstream documentation would extend beyond commodity-level familiarity with existing CBAM requirements.
Contract provisions and procurement requirements
Commercial arrangements may change before any new legislation takes effect. European manufacturers could seek contractual clauses that allow them to request emissions records and obtain audited material declarations. They may also renegotiate prices if regulatory requirements change during the transition toward expanded coverage. Turkish suppliers able to provide requested information promptly could improve their position in procurement decisions.
The proposal also points to potential shifts in investment and sourcing strategy within Türkiye’s industrial base. Manufacturers securing verified lower-emission steel or aluminium could seek longer-term supply agreements with selected mills while maintaining European contracts. Conversely, if EU buyers request price reductions to offset anticipated carbon-related costs, processors with limited margins could face additional commercial pressure tied to those expectations.
Negotiations, classifications and verification capacity
The eventual impact depends on negotiations in Brussels, final product classifications and how far Turkish industry can organise and verify upstream emissions data. Until rules are adopted, exporters and importers are expected to distinguish potential future exposure from obligations already in force under existing CBAM coverage. This distinction affects how companies prepare for possible changes in documentation needs.
Türkiye’s geographic proximity to Europe and established industrial links remain relevant competitive factors for supply relationships. However, under a broader CBAM framework, logistics and pricing alone may not determine which supplier is most attractive for European buyers. Material traceability, emissions documentation and the ability to substantiate production data could become increasingly important elements in procurement decisions across downstream supply chains.