We are a coalition of businesses and associations committed to upholding the ambitions of the Carbon Border Adjustment Mechanism (CBAM) and consequently of the EU Emissions Trading System (ETS). These policies are essential – not only for the EU’s path to cost-effective decarbonisation, but also for securing the long-term competitiveness of European industry in a rapidly evolving global economy.

Recent calls to delay the full implementation of CBAM, omit major sectors or to slow the agreed phase-out of free allocation under the EU ETS, risk undermining the business case for investing in cleantech solutions in Europe. While certain concerns around issues such as export carbon leakage and circumvention risks are valid, these challenges can and should be addressed through smart simplification and strengthening of provisions – not by weakening the core policies.

Why we need a strong CBAM – and how we make it work:

A strong CBAM, aligned with a robust EU ETS, provides the clear and stable CO₂ price signal businesses need to invest in clean technologies. Many industrial players have already made significant investments, anticipating the phase-out of free allowances and the full implementation of CBAM, both starting in 2026. Technologies such as e-SAFs, renewable hydrogen, low-carbon cement, CCS and fossil-free steel all depend on a strong CO₂ price to scale.

Any delay or weakening of CBAM could damage trust in the EU’s carbon market, dampen ETS prices and undermine the business case for these cleantech solutions. It would also cut off the main future source of revenue for the EU Innovation Fund — free allowances from CBAM sectors. Globally, a strong CBAM helps level the playing field and has already pushed countries like China to adopt or expand carbon pricing for heavy industry.

We welcome the simplification measures the CBAM Omnibus has introduced. These adjustments make CBAM more workable without undermining its climate ambition. The same principle should guide the Commission in tackling other issues such as downstream carbon leakage, indirect emissions and potential circumvention. Any new reporting requirements should be introduced only where they deliver clear benefits that outweigh the additional admin burden. Additionally, the expansion of CBAM should focus on products with high emissions intensity, where the climate benefits of inclusion are greatest. By doing so, we avoid the need for another Omnibus in the future.

With the financial obligations of CBAM starting on 1 January 2026, several implementing regulations that are critical for compliance and implementation are still pending completion. This regulatory gap creates serious uncertainty for importers and national authorities, both of whom need clarity to prepare and comply. Finalising these rules must now be the top priority. A large part of the business community is committed to CBAM – but we need stability, legal certainty, and clear operational guidance. We urge the Commission to move quickly to complete the regulatory framework and ensure a smooth rollout.

Other issues around export carbon leakage, circumvention, downstream expansion and others must also not delay the start of CBAM’s financial obligations in 2026. A timely entry into force of the financial phase is essential to ensure predictability for industry and maintain credibility in the EU’s carbon market.

We, the Business for CBAM coalition, stand ready to support efforts to strengthen the ETS and CBAM. A well-implemented, robust CBAM is not just good climate policy – it is essential to keeping Europe competitive in a decarbonising world.

Associations:

Companies:

Secretariat by #SustainablePublicAffairs

EU Transparency number: 666080999148-47