Updated CEO Position on EU Carbon Border Adjustment Mechanism (CBAM)

3 April 2025

Adressing a Critical Gap in CBAM

European tool industry calling for inclusion of downstream products such as hand tools, power tool accessories and measuring tools, in EU Carbon Border Adjustment Mechanism (CBAM)

The European tool industry is an integral part of the EU’s manufacturing ecosystem, supplying essential sectors such as construction, automotive, aerospace, and defense. However, the industry faces increasing competitive pressure due to its exclusion from the Carbon Border Adjustment Mechanism (CBAM). While CBAM was introduced to prevent carbon leakage and ensure a level playing field for European producers, hand tools, power tool accessories and measuring tools remain outside its scope despite their significant reliance on raw materials, in particular steel, which are being regulated by CBAM.

The exclusion of tools from CBAM creates a regulatory imbalance where European manufacturers must procure raw materials at higher costs, while non-EU competitors benefit from cheaper, high-carbon inputs. This allows imported tools to enter the EU market without equivalent carbon pricing, by that distorting competition and undermining both CBAM’s efectiveness and the EU’s broader climate objectives. By addressing only raw materials, CBAM fails to prevent carbon leakage along the value chain, as downstream industries face rising costs that incentivize production shifts outside Europe. This not only weakens European industry but also leads to socio-economic consequences for workers and consumers while ultimately displacing carbon emissions rather than reducing them, exacerbating global carbon leakage.

Due to this competitive disadvantage, we welcome that the European Commission has acknowledged the urgent need for simplification. While the Omnibus Simplification Package will not resolve the fundamental structural flaws of CBAM it opens the possibility to ease the administrative burdens on European manufacturers and create a more level playing field. To achieve this, CBAM should be extended to cover hand tools, power tools accessories and measuring tools as downstream products. This inclusion should be complemented by simplified reporting mechanisms that leverage existing documentation, rather than introducing additional administrative requirements or exceptions for smaller importers of CBAM goods.

We, the European Tool Association CEO, call on the European Commission and Members of the European Parliament to amend the CBAM annex to include hand tools, power tool accessories and measuring tools, thereby ensuring that imported products are subject to the same carbon pricing mechanisms as their European-produced counterparts. In addition, we urge policymakers to go beyond mere administrative simplification and engage in meaningful structural improvements to CBAM, that would lead to a reduction of bureaucratic burdens and re-establish a level playing field with non-EU manufacturers.

You can find the full text of the CEO Position Paper in the Download section below.