CBAM Benchmarks 2026: How EU Carbon Costs Will Reshape Global Trade

EU CBAM Benchmarks Set to Restructure Global Trade

The EU’s provisional Carbon Border Adjustment Mechanism (CBAM) benchmarks signal a costly shift for global exporters. Analysts estimate total CBAM liabilities for iron, steel, aluminium, fertiliser, and cement could exceed €12 billion next year. Meanwhile, importers must manage complex default factors and provisional benchmarks until Q1 2026. As a result, high-emission producers face rising costs, while EU-based manufacturers may gain a competitive advantage. CBAM certificates will align with EU ETS prices, around €73/tCO2 on average in 2025, applying to embedded emissions above the benchmark.

Metals and High-Emission Sectors Face Highest CBAM Costs

The metals sector will account for 88% of CBAM liabilities between 2026 and 2035, with iron and steel contributing 81% of total costs. Blast furnace-basic oxygen furnace (BF-BOF) steel production faces annual CBAM liabilities of over €30 billion by 2035. Aluminium production incurs lower costs, around 7% of 2035 liabilities, yet downstream competitiveness remains at risk. Cement faces extreme exposure due to low value-added and high emissions content. Consequently, CBAM costs will cascade downstream, impacting automotives, construction, and agriculture.

Geographic and Strategic Implications of CBAM

Asia will dominate CBAM certificate demand, contributing 92% of total liabilities by 2035. China leads with €6–9 billion in projected costs, while Türkiye, India, Russia, Indonesia, and Egypt face significant exposure. Meanwhile, low-emission producers can gain market share, whereas high-emission exporters may redirect trade outside the EU. These dynamics will reshape supply chains and sourcing patterns, forcing companies to adopt low-carbon inputs and decarbonized production routes. Ultimately, CBAM is comparable in scale to major tariffs and will have lasting impacts on global trade flows.

SuperMetalPrice Commentary:

CBAM introduces profound strategic shifts across global supply chains. Exporters must invest in decarbonization and efficiency to remain competitive. EU importers and downstream industries will need to adapt sourcing strategies rapidly. As CBAM costs rise and free allocations decline, price signals will drive market realignment, rewarding low-carbon producers and penalizing high-emission exporters. Companies that anticipate these shifts early will maintain resilience in the evolving EU carbon-regulated market.