Manufacturers across Europe are pushing back against a Commission proposal to introduce a "kill switch" into the Carbon Border Adjustment Mechanism — the EU's recently launched scheme that imposes carbon costs on imports to prevent companies from shifting production to countries with weaker climate rules.
Industries including fertilisers, cement, steel, and aluminium warn that weakening CBAM would undermine investment certainty at a critical moment. Many firms have already made capital commitments based on the assumption that the mechanism would remain in place, creating a level playing field between domestic production and imports from jurisdictions without equivalent carbon pricing.
The debate sets up one of 2026's defining policy clashes: the Commission's desire to offer flexibility on climate rules to support competitiveness versus industry's demand for regulatory stability. Environmental groups have warned that any dilution of CBAM would damage the EU's credibility on climate policy and signal that green commitments are negotiable under economic pressure.