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 September 2026 position proposed a broader list of 457. As of 20 October 2026, negotiations on the final legislation were still ongoing.
The proposed expansion is aimed at addressing a carbon-leakage route where production shifts outside the EU while finished goods containing steel or aluminium enter the European market without an equivalent carbon adjustment. Extending coverage to downstream products is intended to reduce that incentive. For mining, refining and materials-processing projects, the potential effects could extend beyond selling output and into the cost of acquiring equipment used to develop and operate industrial facilities.
Imported equipment may carry embedded emissions under downstream CBAM scope
Mining operations depend on steel-intensive infrastructure, including crushers, mills, conveyors, screens, pumps, tanks, structural steelwork and piping. Refineries and smelters also rely on furnaces, cooling systems, pressure equipment, burners, ducting and materials-handling installations. Projects frequently procure equipment from international manufacturing centres, including China, Turkey and India.
Procurement decisions typically weigh purchase prices alongside performance guarantees, freight costs, installation support, spare-parts availability and financing terms. Under a downstream CBAM extension, an additional cost variable could arise from embedded emissions associated with steel and aluminium contained in imported equipment that falls within the final regulatory scope. The extent of exposure would depend on the adopted product list and the calculation methodology.
Not every mining machine or equipment package would necessarily be covered, and the final legislation could differ from the Commission’s original proposal. Project developers therefore cannot treat potential additional CBAM costs for 2028 as settled before legislation is adopted. Still, changes in import costs could be relevant for procurement decisions made before final rules are clear.
Project timelines can bring procurement into 2028 CBAM coverage
Mining and metallurgical projects often have development periods of five to ten years. Equipment specifications, tendering and purchasing decisions typically occur well before commissioning. A project reaching financial close in 2027 could procure major equipment in 2028 or 2029.
This timing could place purchases within the window of the proposed downstream extension. Long-term capital expenditure models may therefore need to account for regulatory uncertainty while negotiations continue over final scope. One potential consequence described in the source material is a change in supplier rankings if carbon-intensive steel content affects carbon-adjusted landed costs.
If imported equipment priced low at quotation stage is included in the final CBAM scope, its carbon-adjusted landed cost could exceed the original offer. Suppliers using lower-carbon materials could become more competitive once any additional border-related cost is reflected. The size of any price difference would depend on which equipment is covered and its material composition under applicable emissions rules.
EPC contracting may need customs and emissions documentation allocation
The proposed extension could affect contract 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 and verification. They may also need mechanisms for allocating costs linked to changes in CBAM legislation.
Where a project company acts as importer of record, it may carry direct import-related obligations while relying on an OEM to provide emissions information about steel and aluminium used in equipment. The source material notes that manufacturers may not currently collect all data needed for that purpose. This can create an interface risk if the party responsible for meeting regulatory obligations does not control underlying production information required to substantiate emissions.
Contracts would therefore need to specify who supplies data, which methodologies apply, how information is verified and how additional costs are allocated if documentation is insufficient or requirements change. Documentation requirements could also affect construction and commissioning schedules depending on the final rules. Incomplete emissions information could delay customs clearance or trigger use of default values.
Financing models may add contingency for imported machinery costs
Project financing already accounts for uncertainties involving steel prices, freight and foreign-exchange movements. If downstream CBAM coverage expands as proposed, financial models may also need a separate contingency for potential costs of imported equipment. The exposure could be more relevant where projects rely heavily on imported machinery and have limited financial flexibility.
Unexpected charges could affect project budgets and debt-service coverage depending on the size of equipment packages and how they are treated under final regulation. The source material lists procurement responses available to mining companies that include increasing sourcing from European manufacturers when feasible. It also includes requiring international OEMs to provide verified emissions information for covered metal inputs or favouring suppliers using lower-carbon steel and aluminium.
Another response described is establishing contractual mechanisms for allocating unforeseen CBAM costs arising from legislation changes. The choice among these approaches would depend on equipment specifications, supplier capabilities, pricing structures and final requirements under the legislation under negotiation.
OEMs face supply-chain evidence requirements for embedded metals
The potential extension would also affect machinery manufacturers supplying the European market. OEMs may need to identify origin and carbon intensity for steel plate, castings, aluminium components and other covered inputs incorporated into their products. The requirement concerns embedded emissions associated with materials in equipment rather than only calculating factory emissions or electricity footprint.
The source material indicates Chinese machinery suppliers could face particular scrutiny because their products are often competitive on price and financing terms while carbon intensity of underlying steel and aluminium varies considerably. Manufacturers able to document supply chains using lower-carbon metals could be better positioned than competitors unable to substantiate input emissions evidence.
European equipment manufacturers could also benefit if expanded coverage reduces price advantages of carbon-intensive imported products. They may compete through lifecycle services, proximity to customers, spare-parts availability, digital integration and lower-carbon material inputs. However, the measure would not remove differences in productivity or high energy costs because its purpose is border adjustment rather than general subsidy.
Expanded CBAM documentation can reach beyond raw materials trade
The implications are not limited to EU mining projects importing equipment. Mining companies and manufacturers outside the EU could face additional documentation requirements if they export equipment-intensive finished goods to Europe or if downstream products they sell become covered by expanded CBAM coverage. This extends relevance further into industrial value chains beyond direct trade in raw materials and basic metals.
For project owners, engineers, EPC managers and lenders mentioned in the source material, an immediate procurement task involves screening equipment registers for potentially covered goods. Such screening can identify supplier country details, metal content of equipment, importer of record status, availability of emissions evidence and contractual allocation of regulatory responsibilities.
The source material states this screening does not require predicting the final 2028 product list with certainty because purchase orders and supplier agreements can still be adjusted during procurement planning. It also notes that steel prices have long been a major variable in mining capital expenditure while embedded emissions intensity of steel used in imported equipment could become an additional factor in procurement and project-cost calculations under a downstream CBAM extension.