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EU Draft Widens Carbon Border Levy to Auto Parts, Appliances

The leaked plan pairs broader import coverage with a conditional payout to EU producers from future border-levy receipts.

Overview

  • An unpublished European Commission draft would expand the CBAM to items such as auto parts, refrigerators and washing machines, according to Reuters.
  • The proposal also lists components including bridge parts, power transformers, cables and agricultural machinery to close perceived avoidance routes.
  • The measure is intended to make importers bear carbon costs comparable to those faced within the EU to discourage production shifts to laxer jurisdictions.
  • A separate draft foresees allocating 25% of CBAM revenues in 2028–2029 to EU manufacturers that invest in cutting their production emissions.
  • The Commission projects about €2.1 billion in CBAM receipts by 2030, as China, India and South Africa object to the plan and some EU officials flag potential WTO risks while the Commission withholds public comment before publication.