European OEMs call for delay to CBAM amid cost fears

Phil Layton (left) is introduced as the incoming president of CECE at the

The Committee for European Construction Equipment (CECE) joined the EGMF and European Materials Handling Federation (FEM), in signing a statement expressing fears about the cost and scope of the Carbon Border Adjustment Mechanism (CBAM).

CBAM is aimed at placing a carbon cost on goods equivalent to the carbon costs facing producers within the European Union under the European Union Emissions Trading System (EU ETS).

The intention behind the scheme is to prevent “carbon leakage” where manufacturers move production to countries with weaker climate regulations, or where EU buyers import cheaper products from countries that do not impose similar carbon costs.

Producers of products like iron and steel, cement, and aluminium have to report the greenhouse gases embedded in products, purchase CBAM certificates according to those emissions, and then surrender the certificates when the goods enter the EU.

But in the statement, CECE and its co-signatories warned that as downstream users of materials covered by CBAM they were bracing for “significant uncertainty” regarding future costs, compliance obligations, and contractual risks.

“Many European manufacturing industries are already experiencing significant uncertainty regarding future costs, compliance obligation, and contractual risks.

“Indeed, manufacturers are currently concluding sales contracts without knowing the future CBAM costs they will have to bear. This undermines legal certainty and exposes companies to significant financial risks that are difficult to hedge – particularly in an industry characterised by long lead times, bespoke projects, and fixed price contracts,” they warned.

The statement also cautioned that the European Commission’s proposal to extend the scope of CBAM to certain downstream products does not address CECE and others’ concerns as it increases legal uncertainty for companies signing long-term contracts “without clarity on future CBAM scope and costs”.

The associations urged European authorities to postpone the implementation of CBAM “to allow sufficient time to conduct a robust and evidence-based assessment of impacts”.