European Commission Unveils Plans to Extend Environmental Levy to Steel and Aluminium Products The European Union has announced plans to expand its environmental levy on imported goods, targeting products made with steel and aluminium, such as washing machines and car parts. The Carbon Border Adjustment Mechanism (CBAM) aims to level the playing field for European industries that adhere to strict emissions rules. Currently, CBAM imposes a tax on carbon-intensive goods from countries with lower environmental standards, including aluminium, cement, electricity, and steel. However, Brussels is concerned that this tax may lead to higher costs for EU manufacturers and potentially cause them to relocate to countries with less stringent environmental requirements. To mitigate this risk, the European Commission has proposed broadening the tax's scope to cover 180 steel and aluminium-intensive downstream products, including machinery, appliances, and other industrial goods. This expansion aims to encourage EU industrial producers to continue their decarbonisation efforts, according to EU industry chief Stephane Sejourne. The list of targeted products includes a mix of industrial goods, such as metal mountings and wiring, and household items like washing machines. The CBAM will enter into full force in January, following a two-year transitional period. Under the system, importers of these goods will be required to declare the CO2 emissions embedded in their production abroad. If these emissions exceed EU standards, firms must purchase emission certificates at the EU's carbon price. The levy is expected to generate €1.4 billion annually for the EU, with 25% of the profits allocated to a dedicated fund supporting EU manufacturers of targeted goods. The proposals must be approved by the European Parliament and member states before implementation.