CBAM, which enters its definitive phase on January 1, 2026, will require importers to pay for the embedded carbon emissions in goods such as stainless steel, aligning costs with the EU’s Emissions Trading System (ETS).
Despite the leak of key benchmark documents earlier in the week, market participants said the complexity of compliance and the lack of final values were still clouding trade.
“The EU has left it until now to release some of the most crucial numbers that go into the calculation of that tax,” Gabriel Rozenberg, chief executive officer of CBAMBOO, said during a panel discussion at the event. “The lack of certainty has been very frustrating.”
Rozenberg noted that the payment obligation falls on the importer of record, regardless of company size. “If you’re the importer of record, you pay,” he said.
Verification requirements are also a concern.
“If every supplier in the world needs to get themselves verified simultaneously, there are only so many verification auditors on the planet who can do this sort of work,” Christophe Lagrange, secretary general of EURANIMI, said.
The leaked draft regulation distinguishes between actual-data and default-value methods for determining emissions.
“We ran numbers and saw that the default values led to a CBAM tax as high as €540 ($625) per tonne if you use the default value,” Lagrange said.
Tom Lord, head of trading and risk management at Redshaw Advisors, said the CBAM price would be derived from the volatile EU ETS price.
“Your CBAM exposure is based on a fluctuating market price,” he said. “Most analyst projections suggest that prices will be up at the €90-120 range in the next couple of years.”
“Done correctly, CBAM can be an opportunity for European producers and importers alike if they hedge their exposure correctly. Left unhedged, then you’re at the mercy of the market,” Lord added.
According to the leaked draft annex, steel hot-rolled coil carries benchmark values of 1.530 tonnes of carbon dioxide equivalent (tCO2) per tonne for blast furnace/basic oxygen furnace (BF/BOF) production, 1.033 tCO2 per tonne for direct reduced iron/electric-arc furnace (DRI/EAF) and 0.288 tCO2 per tonne for scrap-based EAF routes. But with the final set of default values and benchmarks not expected until March or April 2026, market participants said they were still operating in an “untransparent environment”.
“Even if you don’t have every piece of the jigsaw, we have enough to start estimating and tracking your exposure from the first of January,” Rozenberg said.
