The European Union is considering expanding the Carbon Border Adjustment Mechanism (CBAM) beyond basic metals to cover a wider range of downstream manufactured goods. The proposal would broaden the set of components and industrial equipment subject to the policy, affecting exporters and European buyers that rely on established international supply chains.
In an impact assessment using 2024 trade data, the European Commission estimated that exports covered under a “balanced expansion” option would total about €18 billion for China and €8 billion for Türkiye. The same assessment estimated comparable exposure of €6 billion for the United States, €5 billion for the United Kingdom and €3 billion for Japan.
The figures are tied to an assessed policy option rather than actual 2026 import volumes. They also do not reflect the final negotiated product list or any estimated CBAM payments. The Council and European Parliament have proposed broader product coverage, which could change exposure levels for individual trading partners.
Estimated export exposure under a balanced CBAM expansion option
The Commission’s estimates are based on 2024 trade data and relate to exports that would be covered under its balanced expansion approach. For China, the assessed covered exports were estimated at approximately €18 billion, while Türkiye was estimated at around €8 billion.
Other trading partners included in the comparable exposure estimates were the United States at €6 billion, the United Kingdom at €5 billion and Japan at €3 billion. These numbers are presented as policy-option exposure rather than forecasts of final outcomes.
The assessment also notes that broader coverage proposed by the Council and European Parliament could materially alter how much exposure each trading partner faces. As a result, the assessed figures cannot be treated as direct indicators of eventual CBAM liabilities or import patterns.
China’s manufacturing scale and procurement switching constraints
China’s position reflects the scale of its manufacturing supply to European markets. For EU importers, replacing an established component supplier may require new tooling, technical qualification and production trials.
This process can add costs and create potential delays for buyers seeking alternative sources. Even if carbon-related costs rise, higher costs could increase prices for Chinese components without immediately removing them from European demand.
The commercial effect depends on product characteristics, supplier capabilities and how any additional CBAM liability affects total procurement costs. Where suppliers provide significant production capacity or specialised technical expertise, switching may be more complex than comparing quoted prices alone.
Türkiye’s proximity and existing industrial relationships
Türkiye’s sourcing profile differs due to its proximity to major EU markets and its established industrial relationships with European customers. Shorter delivery routes and existing supplier networks can support continued purchasing as buyers reassess carbon-related costs.
These factors do not create a CBAM exemption, and they cannot automatically offset a higher emissions assessment. The relative attractiveness of Turkish suppliers depends on production costs, logistics, emissions evidence and any applicable CBAM liability.
Supplier-level emissions evidence versus country rankings
Exposure varies among producers within both China and Türkiye. Different metal inputs, production routes and manufacturing processes can lead to different recognised emissions even when suppliers operate in the same country or produce comparable products.
A country-level ranking may help identify where trade exposure is concentrated, but it cannot replace installation-level emissions evidence when buyers compare individual suppliers. Procurement decisions increasingly require information linking finished products to relevant inputs and production processes.
Exporters could respond by improving emissions documentation, negotiating how additional costs are allocated between suppliers and buyers, changing qualifying input sources or investing in production efficiency. Some may also seek alternative export markets, depending on demand, tariffs and the cost of securing replacement customers.
Anti-circumvention provisions and defensible supply-chain records
Routing goods through another country should not be treated as a straightforward way to eliminate precursor emissions. Any revised supply chain must reflect genuine production activities and be supported by defensible records.
The proposed anti-circumvention provisions raise the importance of identifying the production installation associated with an emissions claim. Changes in where final processing occurs do not, by themselves, establish that underlying metal or other relevant inputs have a different emissions profile.
For European procurement teams, modelling supplier-specific landed costs is expected alongside the financial and operational consequences of switching. Broad assumptions that imports from one country will disappear or that another will automatically gain market share are described as a weak basis for sourcing decisions.
The proposed expansion could place established trade relationships under pressure, but headline export values alone do not determine outcomes. Exporters would need to defend both price information and emissions evidence for each affected product as European buyers assess whether alternative suppliers can deliver comparable quality, capacity and reliability at a competitive total cost.