Metals & Mining: CBAM Expansion: Raising the Import Cost Floor for European Steel & Aluminium

Research evidence excerpt

Metals & Mining: CBAM Expansion: Raising the Import Cost Floor for European Steel & Aluminium

Update

June 15, 2026 12:07 AM GMT

Morgan Stanley & Co. International plc+MMetals & Mining | Europe Alain Gabriel, CFA

Equity Analyst

CBAM Expansion: Raising the Alain.Gabriel@MorganStanley.comIoannis Masvoulas, CFA +44 20 7425-8959

Ioannis.Masvoulas@morganstanley.com +44 20 7425-0427

Import Cost Floor for European Adahna Ekoku

Adahna.Ekoku@morganstanley.com +44 20 7425-0578

Steel & Aluminium Ferdinand Huber

Research Associate

Ferdinand.Huber@morganstanley.com +44 20 7677-2702

The European Council’s proposed CBAM expansion to

Metals & Mining

downstream imports is likely to further enhance margins for Europe

domestic steel and aluminium producers, reducing carbon Industry View In-Line

leakage and tightening verification processes.

Pushing CBAM further down the value chain. The EU Council has agreed its

general approach on amendments to Regulation (EU) 2023/956, the next legislative

step after the European Commission’s December 2025 proposal to extend the

Carbon Border Adjustment Mechanism (CBAM) to downstream goods and tighten

anti-circumvention rules. The Council draft largely preserves the Commission’s

proposals but expands/refines the downstream product list, mandates annual

reviews of further downstream candidates, strengthens safeguards against

“resource shuffling”, brings pre-consumer steel and aluminium scrap into the

precursor-emissions calculation, and sets clearer rules for temporary exemptions in

serious and unforeseen circumstances. The text is not final law; the next milestones

are the European Parliament’s position, currently with an indicative first-reading

plenary date of 14 September 2026, followed by Council-Parliament negotiations,