Request for Comments on the Effect of the European Union's Carbon Border Adjustment Mechanism and the Proposals To Expand Coverage on U.S. Trade

Issuing agencies

Abstract

The Office of the United States Trade Representative (USTR) invites comments regarding the current and potential impact of the European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) on U.S. producers, including small- and medium-sized producers; workers; U.S. direct and indirect exports; and overall U.S. trade with the EU. Under CBAM, EU importers of products covered by the CBAM (covered products) in the aluminum, cement, electricity, fertilizer, hydrogen, and iron and steel sectors are required to declare information on carbon dioxide and other specified greenhouse gas emissions generated in the production of imported goods and to purchase CBAM certificates based on the amount of that embedded carbon. The EU began the full implementation of CBAM on January 1, 2026. The EU is also considering legislative proposals to expand CBAM coverage to downstream steel- and aluminum-intensive products. USTR is seeking comments on the impact of the CBAM on U.S. trade with the EU, as well as the potential impact of the EU's proposals to expand CBAM coverage. Such comments will help inform continued USTR and U.S. government engagement with the EU on CBAM.

Full Text

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<title>Federal Register, Volume 91 Issue 194 (Thursday, October 8, 2026)</title>
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[Federal Register Volume 91, Number 194 (Thursday, October 8, 2026)]
[Notices]
[Pages 64450-64452]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20615]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[USTR-2026-0661]


Request for Comments on the Effect of the European Union's Carbon 
Border Adjustment Mechanism and the Proposals To Expand Coverage on 
U.S. Trade

AGENCY: Office of the United States Trade Representative.

ACTION: Request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) 
invites comments regarding the current and potential impact of the 
European Union's (EU) Carbon Border Adjustment Mechanism (CBAM) on U.S. 
producers, including small- and medium-sized producers; workers; U.S. 
direct and indirect exports; and overall U.S. trade with the EU. Under 
CBAM, EU importers of products covered by the CBAM (covered products) 
in the aluminum, cement, electricity, fertilizer, hydrogen, and iron 
and steel sectors are required to declare information on carbon dioxide 
and other specified greenhouse gas emissions generated in the 
production of imported goods and to purchase CBAM certificates based on 
the amount of that embedded carbon. The EU began the full 
implementation of CBAM on January 1, 2026. The EU is also considering 
legislative proposals to expand CBAM coverage to downstream steel- and 
aluminum-intensive products. USTR is seeking comments on the impact of 
the CBAM on U.S. trade with the EU, as well as the potential impact of 
the EU's proposals to expand CBAM coverage. Such comments will help 
inform continued USTR and U.S. government engagement with the EU on 
CBAM.

DATES: The deadline for submission of comments is November 9, 2026.

ADDRESSES: Submit written comments in response to this notice on 
<a href="http://regulations.gov">regulations.gov</a>. Follow the instructions for submission in section III 
below. The docket number is USTR-2026-0661. For alternatives to online 
submissions, please contact Timothy Wedding, at <a href="/cdn-cgi/l/email-protection#fb8f8c9e9f9f92959cbb8e888f89d59e948bd59c948d"><span class="__cf_email__" data-cfemail="215556444545484f4661545255530f444e510f464e57">[email&#160;protected]</span></a> 
or (202) 395-6072.

FOR FURTHER INFORMATION CONTACT: Timothy Wedding, at 
<a href="/cdn-cgi/l/email-protection#e09497858484898e87a095939492ce858f90ce878f96"><span class="__cf_email__" data-cfemail="2652514342424f484166535552540843495608414950">[email&#160;protected]</span></a> or (202) 395-6072.

SUPPLEMENTARY INFORMATION:

I. Background on the EU CBAM

    The EU's CBAM is a carbon pricing mechanism that requires EU 
importers of covered products in the aluminum, cement, electricity, 
fertilizer, hydrogen, and iron and steel sectors to declare the 
embedded emissions (carbon dioxide and other specified greenhouse gas 
emissions generated in production) of the imported goods. Importers are 
then required to purchase CBAM certificates. The price of the 
certificates is based on the EU Emissions Trading System (ETS) 
allowance auction prices. According to the EU, the CBAM is intended to 
apply to imported goods a carbon price that is equivalent to the carbon 
price that EU producers pay under the ETS on domestically produced 
goods. To provide information on the embedded emissions generated in 
the production of imported goods, EU importers must either gather this 
information from foreign producers (e.g., U.S. producers of covered 
products that are exported to the EU) or, when company-level data is 
not available, use EU-provided default values. The EU calculates the 
default values using country- and sector-level production and energy 
data to estimate the emissions intensity across countries and sectors. 
However, the EU adds a punitive mark-up that increases the overall 
values, in order to encourage the use of company-level data. CBAM 
requires that any company-level data provided must be verified by an 
EU-accredited third-party verifier.
    The EU's CBAM legislation was enacted in 2023 (Regulation (EU) 
2023/956). Following a transition period, CBAM entered into full 
operation (the ``definitive regime'' or ``definitive phase'') on 
January 1, 2026. While EU importers of covered products are not 
required to begin paying CBAM obligations until September 2027, all 
covered products that are imported on

[[Page 64451]]

or after January 1, 2026 are accruing financial obligations based on 
their embedded emissions; and importers are required to, inter alia, 
maintain accurate records of embedded emissions per ton of product, 
carbon price already paid in the country of production, and supplier 
information. (For more information on the EU's CBAM, including the 
current product coverage, see <a href="https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en">https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en</a>.)
    In December 2025, the European Commission issued a legislative 
proposal to expand CBAM coverage to additional iron and steel products 
and a new sector of ``combined metal products'' that include over a 
hundred downstream steel- and aluminum-intensive goods. The 
Commission's proposal also included new anti-circumvention provisions. 
The Commission's Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT 
AND OF THE COUNCIL amending Regulation (EU) 2023/956 as regards the 
extension of its scope to downstream goods and anti-circumvention 
measures can be found here (see Annex 1 for the list of proposed 
products): <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52025PC0989">https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52025PC0989</a>.
    In June 2026, the Council of the EU, and in September 2026, the 
European Parliament adopted their positions on the Commission's 
legislative proposal. Both the Council and the Parliament expanded the 
list of covered products beyond the Commission's proposal. The 
Council's position would add over 300 products, and the Parliament's 
position would add approximately 400 products to the existing CBAM 
covered products. The Council's Draft Regulation of the European 
Parliament and of the Council amending Regulation (EU) 2023/956 as 
regards the extension of its scope to downstream goods and anti-
circumvention measures--General approach can be found here (see Annex 1 
for the list of proposed products): <a href="https://data.consilium.europa.eu/doc/document/ST-10423-2026-INIT/en/pdf">https://data.consilium.europa.eu/doc/document/ST-10423-2026-INIT/en/pdf</a>.
    The Parliament's Amendments adopted by the European Parliament on 
15 September 2026 on the proposal for a regulation of the European 
Parliament and of the Council amending Regulation (EU) 2023/956 as 
regards the extension of its scope to downstream goods and anti-
circumvention measures (COM(2025)0989-C10-0352/2025-2025/0419(COD)) can 
be found here: <a href="https://www.europarl.europa.eu/doceo/document/TA-10-2026-0276_EN.html">https://www.europarl.europa.eu/doceo/document/TA-10-2026-0276_EN.html</a>.
    Before the proposals become adopted into law, the three EU 
institutions (the Commission, Council, and Parliament) will need to 
engage in ``trilogue'' negotiations to reconcile any difference in 
positions, and then formally approve the legislation, which may occur 
later this year.

II. Topics on Which USTR Seeks Information

    USTR is seeking comments on:
    (1) CBAM's current impact on the costs, regulatory burden, and 
access to the EU's market for U.S. producers, including small- and 
medium-sized producers; workers; direct and indirect exports; and 
overall trade with the EU;
    (2) The potential impact of the EU's three proposals (the 
Commission, Council and Parliament proposals) to expand CBAM coverage 
to additional products on the costs, processes, and access to the EU's 
market for U.S. producers, including small- and medium-sized producers; 
workers, direct and indirect exports; and overall trade with the EU;
    (3) Whether CBAM and the EU's three proposals (the Commission, 
Council and Parliament proposals) disadvantage, advantage, or have 
other impacts and potential impacts on U.S. companies as compared to EU 
companies or third-country companies; and
    (4) Whether and what enforcement action may be appropriate to 
remedy any negative effects of CBAM.
    Such comments may provide specific issues of concern or challenges 
related to complying with CBAM, economic analyses or data, and 
suggestions for changes to CBAM to address these issues. Such comments 
may identify whether or explain how CBAM acts as a trade barrier or 
limits opportunities in the EU market or provides advantages to EU 
companies. Such comments may also include specific products, trade 
values, loss of sales, impact on jobs, or other details to help USTR 
assess the impact of CBAM on U.S. producers, workers, exports, and 
overall trade with the EU. Such comments may also include information 
on the size of the producer (e.g., whether the producer is a micro-, 
small- or medium-sized business), geographic location of production, 
and any other relevant information to help USTR assess the potential 
impacts of CBAM on U.S. producers, workers, and exports.

III. Submission Instructions

    To be assured of consideration, submit your written comments by the 
November 9, 2026, 11:59 p.m. ET deadline. All submissions must be in 
English. USTR strongly encourages submissions via Regulations.gov, 
using the Docket Number USTR-2026-0661.
    To submit via Regulations.gov, use Docket Number USTR-2026-0661 in 
the `search for' field on the home page and click `search.' The site 
will provide a search-results page listing all documents associated 
with this docket. Find a reference to this notice by selecting `notice' 
under `document type' in the `refine documents results' section on the 
left side of the screen and click on the `comment' link.
    Regulations.gov allows users to make submissions by filling in a 
`type comment' field, or by attaching a document using the `upload 
file' filed. USTR prefers that you provide submissions in an attached 
document and note ``see attached comments with respect to CBAM'' in the 
`comment' field on the online submission form. The first page of the 
submission should identify `Comments Regarding CBAM.' USTR prefers 
submissions in Microsoft Word (.doc) or Adobe Acrobat (.pdf). If you 
use an application other than those two, please indicate the name of 
the application in the `type comment' field.
    You will receive a tracking number upon completion of the 
submission procedure at Regulations.gov. The tracking number is 
confirmation that Regulations.gov received your submission. Keep the 
confirmation number for your records. USTR is not able to provide 
technical assistance for Regulations.gov.
    For further information on using Regulations.gov, please consult 
the resources provided on the website by clicking on `How to Use 
Regulations.gov' on the bottom of the home page. USTR may not consider 
submissions that you do not make in accordance with these instructions.
    If you are unable to provide submissions as requested, please 
contact Timothy Wedding, in advance of the deadline at 
<a href="/cdn-cgi/l/email-protection#3f4b485a5b5b5651587f4a4c4b4d115a504f11585049"><span class="__cf_email__" data-cfemail="601417050404090e0720151314124e050f104e070f16">[email&#160;protected]</span></a> or 202-395-6072 to arrange for an alternative 
method of transmission. USTR will not accept hand-delivered 
submissions.
    General information concerning USTR is available at <a href="https://www.ustr.gov">https://www.ustr.gov</a>.

IV. Business Confidential Information (BCI) Submissions

    If you ask USTR to treat information you submit as BCI, you must 
certify that the information is business confidential and you would not 
customarily release it to the public. For any comments submitted 
electronically containing BCI, the file name of the business 
confidential version should begin with the characters ``BCI.'' You must 
clearly mark any page containing BCI with ``BUSINESS CONFIDENTIAL'' on 
the top of that page. Filers of submissions

[[Page 64452]]

containing BCI also must submit a public version that will be placed in 
the docket for public inspection. The file name of the public version 
should begin with the character ``P.'' Follow the ``BCI'' and ``P'' 
with the name of the person or entity submitting the comments.

V. Public Viewing of Review Submissions

    USTR will post written submissions in the docket for public 
inspection, except properly designated BCI. You can view comments on 
Regulations.gov by entering Docket Number USTR-2026-0661 in the search 
field on the home page.

Amy Kreps,
Acting Assistant United States Trade Representative for Environment and 
Natural Resources, Office of the United States Trade Representative.
[FR Doc. 2026-20615 Filed 10-7-26; 8:45 am]
BILLING CODE 3390-F4-P


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