Understanding CBAM
The Carbon Border Adjustment Mechanism (CBAM) is a new EU regulation designed to reduce carbon leakage by placing a carbon price on imports of certain goods from outside the EU. Starting with reporting obligations in October 2023 and moving to financial obligations in 2026, CBAM directly affects industries that rely on steel, aluminium, and other carbon-intensive materials.
For metal importers and their finishing partners, CBAM introduces both challenges and opportunities.
Why CBAM Matters to Metal Importers
Import Costs Will Change
From 2026, importers will need to purchase CBAM certificates that reflect the embedded carbon emissions in their imported goods. The price of these certificates will be linked to the EU Emissions Trading System (ETS), meaning costs may fluctuate with the carbon market.
Data Accuracy is Essential
During the current transitional period, companies must report on the embedded emissions in their imports. For metals, this includes emissions generated during finishing processes. Importers who cannot provide accurate, verified data risk non-compliance and penalties.
Supply Chain Transparency
CBAM requires importers to collect detailed emissions data from their non-EU suppliers and finishing partners. This means closer collaboration with companies providing metal treatments and finishes, who will now play a key role in emissions reporting.
The Role of Finishing Partners in CBAM Compliance
Metal finishing partners, such as anodisers, polishers, or plating specialists, contribute to the overall emissions profile of an imported product. Under CBAM:
• Emissions Reporting: Finishing partners must provide transparent emissions data for their processes.
• Verification: This data must be independently verified to meet EU standards.
• Collaboration: Strong partnerships between importers and finishers ensure that data flows smoothly, reducing delays and compliance risks.
By working with finishing partners who are proactive about CBAM compliance, importers can gain a competitive advantage.
Preparing for CBAM: Steps Importers Should Take
Map Your Supply Chain – Identify which imported goods are covered by CBAM and where emissions data must be collected.
Engage Finishing Partners – Work closely with partners to obtain accurate emissions data.
Verify Data – Use accredited third parties to verify emissions reporting.
Plan for Costs – Factor CBAM certificate prices into future budgets from 2026 onwards.
CBAM FAQ for Metal Importers
Q1: Do all metals fall under CBAM?
Currently, CBAM covers specific carbon-intensive goods, including steel, aluminium, cement, fertilisers, and certain electricity and hydrogen products. Metal importers should confirm if their goods are included.
Q2: When do CBAM reporting and payments start?
Reporting began in October 2023 (transitional phase). Financial obligations, including purchasing CBAM certificates, will start in 2026.
Q3: How is emissions data verified?
Emissions data must be verified by an accredited independent verifier to ensure accuracy and compliance with EU standards.
Q4: What happens if I don’t comply?
Non-compliance can result in penalties, fines, and delays in customs clearance, potentially impacting supply chain reliability.
Q5: How can finishing partners help?
Finishing partners provide the detailed emissions data from their processes, enabling importers to accurately report embedded carbon and meet CBAM requirements.
Conclusion
CBAM is reshaping how metal importers and their finishing partners operate. While it brings new compliance challenges, it also creates opportunities for companies that prioritise accurate emissions reporting and strong supply chain collaboration. By preparing early, importers can not only stay compliant but also position themselves as responsible, forward-looking businesses in a low-carbon future.
