Tyres Europe warns CBAM expansion could shift carbon-leakage risk to tire makers

Brussels – Tyres Europe has warned that a proposed expansion of the EU's Carbon Border Adjustment Mechanism (CBAM) could increase costs for European tire manufacturers while shifting carbon-leakage risk further down the automotive supply chain.

In a joint letter to EU policymakers ahead of trilogue negotiations, Tyres Europe, ACEA and CLEPA called for CBAM to be extended to downstream products only where a “material carbon-leakage risk” has been demonstrated.

They also argued that any extension should take place “only once the methodology, data and verification systems have been shown to work for complex goods.”

Tyres Europe said it supported the objectives of CBAM and the EU's wider climate goals, but warned that certain products and precursors currently under review by the new scope could add further complications and costs. 

Extending CBAM to these products, it said, “would give upstream producers marginal protection while adding costs and moving carbon-leakage risk onto downstream automotive manufacturers.”

Tyres Europe went on to add that the resulting financial pressure would extend to tire producers, which are already facing rising carbon costs associated with steel and aluminium produced in Europe.

The group also described the proposed 2028 implementation date as ‘premature,’ arguing that the existing CBAM regime had yet to demonstrate that it could operate effectively across global supply chains.

The association called for scope decisions to be transparent and evidence-based, alongside simpler reporting requirements and default emissions values that better reflect how products are manufactured.

It also urged policymakers to consider thresholds and compensation for affected downstream industries where equivalent protection against carbon leakage could not be ensured.

“Tire manufacturers in Europe support CBAM's objectives, but an uneven and pointless extension would add costs and compliance burdens across the automotive value chain,” said Tyres Europe secretary general Adam McCarthy.

“We ask negotiators to agree on a proportionate scope that companies can realistically implement and comply with.”