Fasteners, wire, springs and other fabricated steel products are positioned closer to end customers than primary steel. For their manufacturers, electricity procurement is increasingly treated as part of competitiveness strategy rather than only a utility purchase. The proposed expansion of the EU Carbon Border Adjustment Mechanism (CBAM) is expected to reinforce this link by extending coverage to selected steel- and aluminium-intensive downstream goods from 2028.
CBAM scope for current Annex II goods versus proposed downstream expansion
For iron-and-steel and aluminium goods already listed in Annex II, the existing CBAM calculation covers direct emissions. Renewable electricity procurement may provide operational, customer, financing and decarbonisation benefits, without automatically lowering current certificate liability tied to purchased-electricity emissions. A separate legislative file also proposes expanding CBAM downstream coverage from 2028 to selected steel- and aluminium-intensive products.
Under the proposal, both the Council and the European Parliament support expanding CBAM downstream coverage. Their proposed product lists differ and remain subject to negotiation. Until final legislation is adopted, the existing scope continues as the operating baseline for compliance.
Emissions data requirements for importers and manufacturers
If the expansion proceeds, EU importers will need emissions information from manufacturers that may not yet have mature CBAM data systems. Renewable electricity contracts can support corporate decarbonisation efforts and product-carbon-footprint work. However, the evidence must be connected to production and product allocation rather than used as generic plant-wide proof.
This requirement affects how evidence is prepared for CBAM-related reporting. It also increases the need for documentation that can be traced to specific production processes and allocation methods used for covered goods.
Role of energy suppliers, GoOs and long-term contract data
Traders and independent power producers (IPPs) can support manufacturers with granular generation data, relevant Guarantees of Origin (GoOs) and stable long-term pricing. Manufacturers are then expected to integrate these inputs into their own production records and customer-facing evidence. Responsibility for product claims should not be transferred to the electricity supplier.
The shift can create demand for energy suppliers, engineers and verifiers serving smaller industrial sites. Aggregated renewable procurement may reduce transaction costs, while robust installation records, metering and product-allocation controls can help keep claims specific and defensible.
Product boundary definition before attributing renewable-electricity benefits
Where customers request low-carbon steel, producers are expected to define the product boundary and allocation methodology before attributing a renewable-electricity benefit to particular goods. This approach is intended to reduce the risk of applying a plant-wide energy claim across more tonnes than underlying evidence supports. The allocation method therefore becomes central to how renewable-electricity evidence is reflected in product-level claims.
Electricity contract evidence in financing decisions
Banks financing export manufacturers may increasingly assess whether electricity contracts, supplier data and customer reporting systems are sufficiently robust for sales into the EU market. In that context, electricity evidence can become relevant not only for sustainability reporting but also for working-capital facilities and credit assessments. The relevance is linked to how well supporting documentation protects market access under evolving requirements.
Steel buyers are also expected to assess renewable electricity against a defined energy, customer or decarbonisation benefit rather than relying on a generic CBAM saving that the current product methodology does not support.
COM(2025) 989 reforms affecting electricity treatment under CBAM
A separate legislative proposal, COM(2025) 989, would materially revise electricity treatment. The changes include the methodology for electricity default values and conditions for using actual values. The proposal would broaden physical power purchase agreements to include intermediaries and alter elements of the congestion and nomination framework.
The Council adopted its negotiating position on 12 June 2026, followed by the European Parliament on 15 September 2026. The proposal remains under interinstitutional negotiation and should not be treated as enacted law.
As CBAM coverage extends deeper into finished goods, electricity procurement may become more integrated into supply-chain planning. Its contribution is expected to be assessed alongside process emissions, material inputs and product-specific requirements applicable to each covered item.