Technology and Science16 June, 20262 min read
EU Carbon Border Adjustment Mechanism Starts CO2 Costs For Steel And Aluminum Imports January 1, 2026
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CBAM payments for steel, aluminum, cement imports begin January 1, 2026. EU border carbon tax charges CO2 emissions on imported goods.
CBAM expands and tightens
The European Union’s Carbon Border Adjustment Mechanism (CBAM) is moving from transitional reporting into a phase that requires CO2-linked costs for imports, with Euronews saying steel and aluminum exporters to the EU will begin paying for CO2 emissions linked to their production starting January 1, 2026. Euronews also reports that the measure will require EU importers to purchase and surrender CBAM certificates corresponding to the CO2 emissions embedded in their exports, at a price aligned with the EU carbon market, roughly 70 to 100 euros per ton of CO2.
“Steel and aluminum exporters to the EU will begin paying for CO2 emissions linked to their production starting January 1, 2026.”
Le Monde frames the CBAM as a new step in taxing CO2 emissions on Thursday, January 1, while noting that “the details of the mechanism's implementation and the risks of fraud have prompted numerous criticisms.” In parallel, the Commission proposed extending CBAM’s scope to about 180 products with high aluminum and steel content, with Materia Rinnovabile saying the proposal would enter into force in 2028 and aims to reduce carbon leakage risks.
Compliance burdens and disputes
Critics argue CBAM can raise costs when embedded-emissions data are incomplete, and Euronews quotes ESG Institute executive director Jaime Amoedo saying importers will use “prudent default values, which increases the cost of certificates.” Euronews adds that “Exporters who cannot meet these expectations risk losing EU customers altogether,” linking the compliance challenge directly to market access.
The practical burden is also described in the South China Morning Post, which says Neil Miao’s small company in northern China’s Hebei province lacked the ability to track or understand the metrics demanded by a “complex, multi-tabbed spreadsheet” of technical data. In that same account, the paper says the system entered its implementation phase in January and is intended to prevent “carbon leakage” by ensuring products entering the European Union face the same carbon-related costs as domestically made goods.
Industry stakes and future scope
Beyond immediate certificate costs, the CBAM is set to expand further into downstream products, with Decision-achats.fr reporting a planned entry into force on January 1, 2028 for a legislative proposal submitted on December 17, 2025 to extend to downstream products with high steel or aluminum intensity. Decision-achats.fr lists electrical cables, transformers, automotive parts, construction equipment, and household appliances as examples of product families that would move into a compliance perimeter, while also warning that procurement teams must map embedded emissions using Commission default values.
In the aluminum sector, ING Think argues that a carbon emissions tax on imports could level the playing field with China, but says “The full elimination of all free allowances and the setting of the price for every ton of CO2 imported through the Carbon Border Adjustment Mechanism (CBAM) is not expected before 2034.” ING Think also quantifies the emissions gap it attributes to electricity sources, saying “Each ton of aluminum produced in China emits three times as much CO2 as in Europe,” and ties parity to carbon prices ranging from €25-€30 per ton in low-electricity-cost regions to €65-€70 in high-electricity-cost regions.