USTR issues request for comments on the EU’s Carbon Border Adjustment Mechanism

On October 8, 2026, the Office of the United States Trade Representative (USTR) published a request for comments (RFC) on the effects of the European Union’s Carbon Border Adjustment Mechanism (CBAM) on US trade and businesses.¹ The RFC does not initiate an investigation under Section 301 of the Trade Act of 1974 and does not itself provide a legal basis for the imposition of tariffs or other trade measures.  Instead, USTR intends to use the public’s input to “help inform continued USTR and U.S. government engagement with the EU on CBAM,” and suggests that responsive trade measures may be under consideration.

About the EU CBAM

The CBAM is an environmental policy instrument designed to support the EU’s climate ambitions of a net 55% reduction in greenhouse gas emissions by 2030 and climate neutrality by 2050.  It complements the EU Emissions Trading System (ETS) by ensuring that imported goods and equivalent goods produced within the EU face an equivalent carbon price by requiring importers to purchase certificates based on the embedded emissions in the imported products, adjusted for any emissions fees that were already paid in their countries of origin.  The mechanism currently applies to cement, iron and steel, aluminum, fertilizers, hydrogen, and electricity, together with certain precursors and downstream products.²

From January 1, 2026, importers must submit an annual CBAM declaration reporting embedded emissions based on actual verified emissions or, where applicable, default values.  They must also purchase and surrender CBAM certificates corresponding to the relevant embedded emissions.

US concerns with CBAM

The Trump administration has previously sought to secure a CBAM carve-out, or comparable accommodation, for US industry.  In the August 2025 US-EU framework for an agreement on reciprocal trade, the EU agreed “to work to provide additional flexibilities in the CBAM implementation” but did not make any specific concessions.³   Negotiations are continuing on a more robust follow-up to the framework agreement.

USTR’s 2026 National Trade Estimate Report identified several specific concerns with how the EU has implemented CBAM:  “onerous reporting requirements and disclosure of sensitive and confidential business information,” abrupt implementation, CBAM not giving importers “credits for regulatory and other non-price mechanisms for reducing carbon emissions,” “punitive markups” in the default emissions values, bottlenecks in the third-party verification process, planned extensions of CBAM to more downstream products, and the proposed fund to “reimburse a portion of the carbon costs borne by EU producers under the EU ETS.”⁴

Submitting comments

Interested stakeholders are invited to submit comments by November 9, 2026, via regulations.gov.⁵  The RFC includes additional instructions on how to prepare and file comments.

The RFC highlights that USTR is specifically interested in receiving comments addressing the following topics:

• CBAM’s current economic impact on US producers and trade with the EU.
• The potential effects of current EU proposals affecting CBAM, including the proposals for expansion of CBAM to more downstream products.
• Whether CBAM may disadvantage, advantage, or have other impacts on the competitiveness of US companies compared to EU and third-country companies.
• Whether USTR should take any enforcement actions in response to injuries caused by CBAM.

Authors: Ian Saccomanno, Samuel Scoles, Karly Graf
 

^{1 “Effect of the European Union’s Carbon Border Adjustment Mechanism and the Proposals to Expand Coverage on U.S. Trade,” 91 FR 64450 (October 8, 2026).}

^{2 The complete list is contained in Annex I to Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083.}

^{3 “Joint Statement on a United States-European Union framework on an agreement on reciprocal, fair and balanced trade,” August 21, 2025.}

^{4 See pages 207-208 of USTR’s “2026 National Trade Estimate Report on Foreign Trade Barriers,” March 31, 2026.}

^{5 Regulations.gov docket “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,” Docket ID: USTR-2026-0661.}

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