Meeting in plenary session, the European Parliament approved on Tuesday, September 15, the extension of the Carbon Border Adjustment Mechanism (CBAM), by 464 votes in favor, 50 against and 159 abstentions. The text must now be negotiated with the European Union’s 27 member states before its final adoption. Far-right groups mostly split between abstaining and rejecting the text, while other political families, from conservatives to the radical left, largely backed the parliamentary position.

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The CBAM aims to limit carbon leakage, meaning the relocation of production to countries where climate constraints on industry are weaker. It complements the European Union’s emissions trading system, to which European producers in several energy-intensive sectors are subject. Having entered its effective phase in early 2026, the mechanism requires importers of certain high-emission goods to pay a carbon cost comparable to that borne by producers subject to the European carbon market. The initial scope covers steel, aluminum, cement, fertilizers, electricity and hydrogen.

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The extension approved by MEPs concerns finished or semi-finished metallurgical products. The stated objective is to prevent companies from circumventing the mechanism by importing a processed good containing steel or aluminum, rather than the raw material directly covered by the CBAM. In a preparatory note published in September 2026, the European Parliament’s research service indicated that the Commission’s proposal added 180 downstream products, averaging 79% steel or aluminum content and a high risk of carbon leakage. Parliament also requested that the extension be based on transparent quantitative methods.

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The European Commission defended the extension in the name of the continent’s industrial competitiveness, amid heightened competition with China and the United States. The regime also includes an exemption threshold of 50 tonnes of imported goods per importer per year, adopted as part of the mechanism’s simplification. According to European institutions, this threshold should exclude around 90% of importing companies from administrative obligations while maintaining coverage of around 99% of the emissions concerned.

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Some of EU’s trading partners such as China - the world’s largest carbon emitter - cried foul over the carbon border tax, calling it discriminatory.

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Hungarian drone manufacturer ABZ Innovation has opened a major new production facility in Szentendre, significantly increasing Europe’s capacity to manufacture heavy-duty unmanned aircraft.

The €7 million expansion is designed to produce around 2,000 drones per year on a single shift and as many as 3,500 with two shifts, according to CEO and co-founder Karoly Ludvigh. The company describes the facility as one of the largest dedicated civilian drone production sites in Europe.

ABZ expects the expansion to increase its production roughly fivefold by the end of 2027 as demand grows across Europe and the United States.

The new site is approximately four times larger than the company’s previous manufacturing facility. ABZ is targeting a threefold increase in production during 2026, followed by another significant expansion next year.

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Building a European drone supply base

The investment comes as European governments and technology companies increasingly focus on building domestic drone production capacity and reducing reliance on Asian suppliers.

ABZ said the additional capacity should help strengthen European manufacturing in a market that remains heavily dependent on Chinese-built drones and components.

The expansion was backed by investors including U.S.-based Assembly Ventures, Germany’s Vsquared Ventures and Hungary’s Day One Capital.

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cross-posted from: https://scribe.disroot.org/post/11386336

Full report: REDESIGNING SUPPLY CHAINS - EU FIRMS IN A TIME OF GEOPOLITICAL RISK - (pdf)

• Almost two-thirds of EU firms say they are prepared to manage geopolitical risks, according to new study.
• European single market acts as a buffer while companies active beyond EU diversify suppliers and markets, says report by EIB and European Commission.
• Tariffs and regulatory compliance overtake logistics and supply shortages as main trade obstacles.

European Union businesses increasingly see geopolitical disruptions as a structural feature of global trade and are redesigning supply chains accordingly, a new EU report finds.

Almost two-thirds – 64% – of EU firms consider themselves prepared to handle geopolitical risks, according to the study, which was carried out by the European Investment Bank (EIB) and the European Commission. Such preparedness differs by size, with the share being as high as 73% for the biggest companies and less than half for small and medium-sized enterprises (SMEs).

The report, entitled “Supply chains and the rise of geopolitical risks: EU firms in a fragmenting world”, says businesses in Europe are also relying less on short-term crisis measures and gaining support from the European single market. The share of EU importers adjusting supply chains fell from 50% to 37% between 2023 and 2025 as stockpiling almost halved to 17%.

“Geopolitical uncertainty is no longer a temporary shock for European companies,” said Román Arjona, chief economist at the Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW). “The encouraging finding is that firms are adapting by diversifying, investing in preparedness and using the single market as a source of stability. Reducing internal barriers and supporting businesses throughout the entire investment journey is essential to bolster European competitiveness in technologies and strategic sectors critical to the EU.”

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The study finds that 67% of EU businesses trading with the United States and 60% of those engaged in commerce with China expect tariffs to remain a long-term obstacle.

The report draws on the latest EIB surveys of supply chains and investment activities. The most recent “Supply Chain Survey” covered 1,165 EU importers and exporters while the latest “EIB Investment Survey” covered about 12,000 European businesses along with 800 US firms.

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Looking ahead, businesses in the EU regard advanced digital technologies, research and innovation as becoming increasingly important. Despite higher costs and uncertainty, almost 90% of EU firms expect export performance to be stable or to improve, although companies exporting to the US and China are less optimistic.

The report calls for a European policy mix that includes targeted financial instruments for geopolitical and trade risks, better early-warning systems, greater regulatory clarity, progress on EU trade agreements and deeper single-market integration. It also highlights the role of EIB support in strengthening innovation, digitalisation, skills and supply-chain resilience across Europe.

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