CBAM Downstream Extension: What the Chemicals and Polymers Debate Means for Your 2028 Supply Chain

Picture early 2028. You have bought the same machined steel housings from the same supplier for six years at a stable price. Then your CBAM declaration needs the embedded emissions of every shipment, your supplier sends nothing usable, and the default value turns a stable contract into a margin problem.

That scenario is the practical meaning of the CBAM downstream extension. Carbon cost is moving from the steel mill and the smelter to the parts, components and, possibly, chemicals that your business actually buys. Here is what is proposed, what is settled, and what you can do about it now.

What is the CBAM downstream extension, and is it law yet?

It is an amending proposal to Regulation (EU) 2023/956 (CBAM) that would add downstream goods made from steel and aluminium to the scope, and it is not law yet. It is in trilogue negotiations between the European Parliament, the Council and the Commission. The first trilogue was held on 20 October 2026, with a second round set for 30 November 2026.

The Commission published the proposal on 17 December 2025, adding 180 goods across iron and steel products, fabricated metals, machinery and equipment, vehicles, medical instruments, and metal furniture. The proposal states that "the extension of the scope of CBAM should apply from 1 January 2028."

The Council adopted its general approach on 12 June 2026 and the Parliament its mandate on 15 September 2026, according to Mayer Brown's trilogue briefing. The timetable signals an intent to agree before the end of 2026. Until a final text is published in the Official Journal, every product list below is a negotiating position.

Will CBAM cover chemicals and polymers?

Possibly, but nothing is decided. The Parliament's position goes furthest: Agence Europe reports that MEPs want 457 products, "including certain chemicals and polymers," against 180 from the Commission.

PwC Switzerland's code-level comparison of the committee text found that organic chemicals (CN chapter 29) appear only in the Parliament's proposal, not in the Council's. Mayer Brown adds that the Parliament also calls on the Commission to assess extending CBAM to "chemicals and petrochemicals" in a future scope review.

Read that as a direction of travel, not a 2028 obligation: products on only one institution's list are the most likely to be traded away. Still, if you buy organic chemicals or polymers from outside the EU, CBAM is no longer a steel and aluminium story you can leave to someone else.

• Commission proposal. Date: 17 December 2025; Additional products: 180; Notable scope features: Downstream steel and aluminium goods; proposed application 1 January 2028.
• Council general approach. Date: 12 June 2026; Additional products: About 377 (180 plus 197 more, per PwC); Agence Europe reports 400; Notable scope features: Adds tools and cutlery (CN chapter 82).
• Parliament mandate. Date: 15 September 2026; Additional products: 457; Notable scope features: Committee text adds organic chemicals (CN chapter 29), more steel and aluminium articles and railway equipment; 5-tonne aluminium de minimis.

Which downstream products could CBAM cover from 2028?

The safest planning base is the Commission's 180 goods plus the additions both co-legislators agree on. Beyond the Commission's list, PwC counts 154 products that appear in both the Council and Parliament proposals, which it considers more likely to survive trilogue.

Most of the Commission's additions sit in CN chapters 73, 74, 83, 84, 85, 87, 90 and 94, covering sectors such as fabricated metals, machinery and equipment, vehicles, medical instruments and metal furniture. For automotive and industrial manufacturers, that means components, not just raw metal. For chemical companies, it means watching chapter 29 and any review clause closely.

Deloitte estimates that 3,800 to 3,900 SMEs with no CBAM obligation today would be brought into scope.

Why does product-level embedded emissions data become a customs input?

Because under CBAM you pay for the emissions embedded in each good you import, and the number you declare comes either from verified supplier data or from a default value. The European Commission's Guidance Document No. 1 is explicit: embedded emissions "are to be reported on the basis of either default values or actual verified emissions," and actual data can replace defaults "only if they are verified by an accredited verifier."

The definitive period is already running. It started on 1 January 2026, and the 2026 CBAM declaration is due by 30 September 2027 under the simplification Regulation (EU) 2025/2083. Certificates can be bought through the central platform from February 2027. In 2026 the price follows the quarterly average of EU ETS auctions: EUR 75.36 in Q1, EUR 75.28 in Q2 and EUR 82.32 in Q3, its highest level this year. From 2027, prices move to a weekly average.

A simple illustration, with hypothetical numbers: you import 1,000 tonnes of a steel component. The default is 2.5 tCO2e per tonne; the supplier's verified actual value is 1.8. That gap of 700 tCO2e, priced at the Q3 2026 rate of EUR 82.32, is roughly EUR 57,600 before free-allocation adjustments. Across hundreds of CN codes, the data question becomes a P&L question. We unpacked the pricing mechanics in From Theory to Invoice.

For downstream goods, the calculation gets harder: a machined part contains precursors, often from several upstream sites. That is the same roll-up logic as a product carbon footprint (PCF). The scopes differ (CBAM is not a cradle-to-gate PCF under ISO 14067), but teams that already run product carbon footprints at scale have the bill-of-materials structure and supplier links CBAM will need.

How should importers prepare supplier emissions data for the CBAM extension?

Start with the products most likely to stay on the final list, and treat supplier data collection as a 2027 project, not a 2028 one. Suppliers need time to learn the method, measure at installation level and engage a verifier.

1. Map your CN codes. Cross-check your import data against the Commission, Council and Parliament lists. Flag codes on all three, on two, and on one.
2. Check the threshold. The current de minimis is 50 tonnes of net mass per importer per year. New downstream codes can push you over it, and the Parliament wants a 5-tonne threshold for aluminium.
3. Model your exposure. Run volumes against default values at the current certificate price, then against plausible actual values. Rank suppliers by the euro gap.
4. Prioritise suppliers. Focus first on high-volume, high-gap suppliers whose installations are likely to beat their country default.
5. Collect installation-level data. Ask for direct and indirect emissions, production volumes and precursor data per installation and production period, in the CBAM method rather than a generic corporate footprint.
6. Plan verification. Actual values only count once an accredited verifier has checked them. Build this into supplier contracts.
7. Keep an evidence trail. Anti-circumvention rules (below) mean you may need to prove where and when goods were produced.

Collecting this at scale is a supplier engagement problem as much as a compliance one. CO2 AI's Supplier Engagement Hub helps teams request, collect and review product-level emissions data from suppliers, and links it to their product footprints.

What does anti-circumvention mean for your sourcing decisions?

It means switching suppliers or adding a light processing step outside the EU will not, by itself, reduce your CBAM bill, and some moves may raise it. All three institutions are tightening these rules.

The Commission proposed that authorities could require proof that goods came from the declared installation and production period, and that where abuse risk is high, country-specific defaults would apply unless extra evidence is provided. The Council added a "harmful resource shuffling" test, and the Parliament would cover slightly modified or processed goods unless the change alters their essential characteristics/

The lesson for procurement: favour suppliers who can document real, installation-level decarbonisation. Our analysis of CBAM and Indian steel shows the market is already pricing that in.