The next stage of the EU Carbon Border Adjustment Mechanism may be far more visible to procurement teams than the first.
CBAM’s current framework is associated principally with carbon-intensive basic materials. But EU institutions are now considering an expansion to downstream steel- and aluminium-intensive goods. The European Commission has proposed extending the mechanism to around 180 downstream products from 1 January 2028, while the European Parliament’s Environment Committee has backed an expansion to finished goods such as fasteners, wire, springs and household articles.
The eventual scope remains subject to the legislative process, but the direction is clear: carbon considerations are moving further into manufactured products and supply chains.
For procurement leaders, this changes the practical question.
It is no longer enough to know that a supplier provides a piece of equipment, a component, a vehicle part or a fabricated product. Organisations will increasingly need to understand what materials sit inside it, where those materials originated, and whether suppliers can provide sufficiently reliable emissions information.
Why downstream goods change the challenge
Raw-material CBAM exposure is already complex. A downstream extension introduces additional layers.
A procurement team may source machinery, metal furniture, refrigeration equipment, components or industrial products that contain steel or aluminium from several suppliers and countries. The finished product can cross borders more than once before reaching the buyer. A company may have extensive product specifications but limited visibility into the material inputs used several tiers upstream.
That creates a data challenge, but also a commercial one.
If product-level carbon information is incomplete, procurement teams may struggle to compare suppliers, understand future cost exposure or reflect carbon-related risk in contracts. They may face rushed information requests from finance, compliance or customers, with no agreed process for gathering and validating supplier responses.
The proposed expansion is still under negotiation. It should not be treated as a final rule. But waiting for the final commodity-code list before building internal capability would be a mistake.
Three changes procurement teams should make now
Build a downstream-goods watchlist
Start with the organisation’s import and purchasing data. Identify goods with substantial steel or aluminium content, including machinery, fabricated components, equipment, vehicles, appliances and construction-related materials. Link purchasing categories to customs and product classifications wherever possible.
The aim is not to produce a perfect CBAM assessment immediately. It is to identify where potential exposure is concentrated and where supplier engagement should begin.
Turn supplier questionnaires into evidence requests
Generic ESG questionnaires will not be enough. Suppliers may need to provide more specific information on material origin, relevant precursors, manufacturing location, embedded-emissions methodology and the evidence available to support the data.
The distinction is important. A supplier commitment to decarbonisation is useful context. It is not the same as evidence that allows a buyer to understand the embedded-emissions profile of a purchased product.
Change the language of contracts and sourcing decisions
Procurement terms should anticipate the need for data sharing, cooperation, record retention and allocation of regulatory costs where relevant. Suppliers should understand what information may be requested, how often it may be updated and what happens if data cannot be provided.
Supplier selection should also reflect data capability. Price, quality and delivery remain essential. But a supplier’s ability to provide credible, reusable carbon information is becoming an additional indicator of supply-chain maturity.
Product data is becoming commercial infrastructure
The real issue is not whether every purchasing team becomes a carbon-accounting expert. It is whether the organisation has a practical way to connect product, supplier, customs and emissions information.
This is where procurement, trade compliance, sustainability, finance and logistics need a shared operating model.
Procurement understands the supplier relationship and commercial leverage.
Trade and customs teams understand codes, origin and import flows.
Sustainability teams assess emissions methodologies and data quality.
Finance teams model cost exposure and margin implications.
Logistics teams provide visibility over the physical movement and documentation of goods.
No single function can manage the issue alone.
The companies that move early will be better placed to avoid duplicated supplier requests, identify exposure before it reaches the balance sheet and use carbon-data capability as part of a more resilient sourcing strategy.
Do not confuse data collection with readiness
A large spreadsheet of supplier emissions is not a CBAM strategy.
Readiness means being able to answer practical management questions: Which imported products could be affected? Which suppliers can provide usable information? Where are data gaps concentrated? Which contracts contain carbon-cost pass-through mechanisms? And which sourcing choices could reduce both emissions exposure and operational risk?
A practical first step is to select one purchasing category—such as fabricated steel components, refrigeration equipment or industrial machinery—and run a short pilot. Map the product flow, identify supplier evidence available today, assess gaps and agree who owns each action.
That exercise will reveal far more than a high-level risk statement.
The broader signal
CBAM is often described as a border mechanism. Its commercial significance is wider.
As carbon regulation moves downstream, the value of product-level traceability rises. Supply chains that can link material origin, embedded emissions and commercial terms will be better able to respond to regulation, customer scrutiny and carbon-related pricing risk.
For procurement leaders, the message is straightforward: carbon data is becoming part of the product specification.
Sources
European Parliament, MEPs strengthen the EU’s carbon border adjustment mechanism and close loopholes, on support for extending CBAM to downstream goods.europarl.europa
PwC, EC proposes CBAM expansion to 180 downstream products, including the proposed 1 January 2028 start date and illustrative product categories.pwc
Akin, CBAM Expansion Poised to Impact Global Supply Chains, on the evolving EU institutional positions and legislative timeline.akingump
Customs Clear, CBAM: the carbon price at the EU border, on the proposed treatment of embedded emissions in metal precursors for downstream goods.customsclear