What is the current scope of the EU's Carbon Border Adjustment Mechanism (CBAM), and when does it officially take effect?

The EU's Carbon Border Adjustment Mechanism (CBAM) officially takes effect on 1 January 2026 and initially covers six imported products: steel, aluminum, cement, fertilizers, electricity, and hydrogen.

How will the CBAM affect Chinese automakers exporting to the EU in the near future?

The EU has proposed a legislative draft to expand CBAM to approximately 180 steel- and aluminum-intensive downstream products—including machinery, automobiles, and automotive parts—starting in 2028, making carbon compliance an increasingly binding constraint on Chinese auto exports to the EU.

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Geely executives warn EU carbon border taxes will increasingly restrict exports. The CBAM scheme covers six basic material sectors starting in 2026, with plans to expand to automotive parts by 2028.

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