CBAM Phase 2 Expansion: Which New Sectors Will Be Added?

The EU is planning to expand CBAM to additional sectors in Phase 2. This guide covers the sectors under review, the expected timeline, and what SA exporters in those sectors should do now.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

CBAM Phase 2 Expansion: Which New Sectors Will Be Added?

CBAM Phase 1 covers six sectors. The European Commission has already signalled its intention to expand CBAM to additional sectors in Phase 2, and SA exporters in those sectors need to start preparing now.

The Phase 2 Review Process

Under EU Regulation 2023/956, the European Commission is required to review the scope of CBAM by December 31, 2025, with a view to expanding coverage to additional sectors. The review considers:

▸Carbon leakage risk in the sector
▸Availability of embedded carbon data
▸Feasibility of CBAM implementation
▸Impact on EU competitiveness

The Commission's review report is expected to be published in mid-2026, with legislative proposals for Phase 2 following in 2026–2027.

Sectors Under Phase 2 Review

The following sectors are under active consideration for Phase 2 inclusion:

| Sector | SA Relevance | Expected Timeline | |--------|-------------|-------------------| | Ferrochrome | Very High | 2027–2028 | | Ferromanganese | Very High | 2027–2028 | | Silicomanganese | High | 2027–2028 | | Organic chemicals | Medium | 2028–2030 | | Polymers | Medium | 2028–2030 | | Downstream steel products | High | 2028–2030 |

What SA Exporters in Phase 2 Sectors Should Do Now

1. Start tracking embedded emissions immediately Establish an emissions inventory for your operations now, before Phase 2 takes effect. This gives you 2–3 years of historical data to support your CBAM declarations.

2. Engage a verifier Identify and engage an accredited verification body to review your emissions methodology. Early engagement reduces costs and ensures your data is CBAM-ready.

3. Model your CBAM liability Use the CBAM Calculator to estimate your potential CBAM liability under Phase 2, based on current ETS prices and your expected EU export volumes.

4. Explore decarbonisation options The earlier you invest in decarbonisation, the lower your CBAM liability when Phase 2 takes effect. Renewable electricity, process efficiency improvements, and fuel switching are the most impactful options.

For a complete CBAM compliance registration pathway, visit the Digital Product Passport Registry.

Frequently Asked Questions

What sectors are being considered for CBAM Phase 2?

The European Commission is reviewing several sectors for Phase 2 inclusion, including: organic chemicals, polymers, ferrochrome, ferromanganese, silicomanganese, and potentially some downstream steel products. The review is expected to conclude in 2026–2027.

When will CBAM Phase 2 take effect?

The European Commission has indicated that Phase 2 expansion is expected to take effect in 2028–2030. However, the timeline may be accelerated if the Phase 1 implementation is successful.

Should SA exporters in Phase 2 sectors start preparing now?

Yes. SA exporters in sectors under Phase 2 review should begin tracking embedded emissions now, before formal inclusion. This gives them time to establish data systems, engage verifiers, and potentially reduce their carbon intensity before CBAM applies.

Will CBAM eventually cover all SA exports to the EU?

The EU has indicated that CBAM may eventually cover all sectors included in the EU ETS, which includes aviation, shipping, and a wide range of industrial processes. The long-term trajectory is toward comprehensive carbon border adjustment.

How can I stay updated on CBAM Phase 2 developments?

Monitor the European Commission's CBAM portal (cbam.ec.europa.eu) for official announcements. The Digital Product Passport Registry also provides regular updates on CBAM regulatory developments for SA exporters.

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