Steel Trade Faces Rising Costs as CBAM Takes Effect in 2026

CBAM Implementation Will Reshape European Steel Trade in 2026

The European steel industry will soon face significant changes as the Carbon Border Adjustment Mechanism (CBAM) becomes operational. Starting January 1, 2026, CBAM will impose new carbon cost obligations on steel importers. Industry leaders highlighted this issue during the recent Made in Steel event in Italy, according to Fastmarkets.

Although the mechanism begins in 2026, financial impacts will start in May 2027. This delay allows time for administrative setup, including the launch of the electronic trading platform. However, companies must begin preparing now to manage future cost burdens.

CBAM Compliance Requires Financial Planning and Supply Chain Coordination

To comply with CBAM, importers must register on the new EU platform. They will need to declare Scope 1 and 2 emissions initially, and later include Scope 3. According to Alexander Julius, President of Eurometal, the delay until 2027 stems from platform readiness issues. However, this delay won’t reduce the financial impact.

Companies will need to purchase CBAM certificates for goods imported in 2026, even if payments are delayed until 2027. This requirement will create a need for financial reserves and early strategic planning. Importers must also prepare for annual increases in certificate obligations—from 2.5% of emissions in 2026 to 100% by 2034.

Non-EU suppliers can also register their facilities to declare emissions, but EU-approved verifiers will need to validate the data. By 2027, an estimated 100,000 companies may access the certificate system, significantly widening its scope.

Higher Emissions Will Raise Steel Import Costs

CBAM will add an estimated €56 per tonne for higher-emission steel products. This cost will push companies to understand carbon accounting and adapt purchasing strategies. According to Julius, stronger cooperation between importers, processors, and end-users will be critical.

Businesses may need to update contracts to include carbon tracking. Emissions reporting tools and digital systems can help meet compliance and manage REDD certificates. These tools could play a major role in controlling costs and improving transparency across the steel supply chain.

Meanwhile, non-EU countries such as Ukraine are seeking exemptions or delays, as CBAM could cost the country up to $7.2 billion in GDP by 2030. Industry groups like Ukrcement are urging the EU to reconsider the timeline.