The European Union’s Carbon Border Adjustment Mechanism (CBAM) enters its definitive phase on October 1, 2026, requiring importers of steel, aluminum, cement, fertilizers, and electricity to purchase carbon certificates matching the embedded emissions in their goods.
What’s changing:
- The transitional reporting phase (October 2023 – December 2025) required only quarterly emissions reporting
- From October 2026, importers must actually pay for carbon certificates at the EU ETS price (currently around €70/ton CO2)
- The free allowance phase-out begins — EU manufacturers will gradually lose their free carbon permits, making imported goods subject to the same carbon cost
What this means for China importers:
- Steel and aluminum products are hit first. If you import structural steel, aluminum profiles, or metal components from China to the EU, your costs will rise
- Chinese steel producers face higher embedded emissions (coal-based blast furnaces vs. EU electric arc). The carbon cost differential could be €50-100/ton of steel
- Paper trail matters. Chinese suppliers who can document their emissions data (energy source, production method) will be more valuable partners than those who can’t
- Scrap-based and electric arc furnace production from China will have a cost advantage under CBAM — worth asking suppliers about their energy mix
Three things to do now:
- Ask your Chinese steel/aluminum suppliers for verified emissions data per ton of product
- Factor CBAM costs into your Q4 2026 and 2027 import budgets — estimate €10-15/ton initially, rising toward €50-70/ton by 2030
- Consider diversifying to suppliers using electric arc furnace or renewable energy — they’ll have a widening price advantage
The tax starts small but the trajectory is clear: carbon-intensive imports get progressively more expensive through 2034. Early preparation is cheaper than last-minute scrambling.
Sources: European Commission CBAM Regulation, Carbon Market Watch, June 2026