The European Commission has replied to a request for clarification from European steel distribution association EUROMETAL, confirming that the Carbon Border Adjustment Mechanism (CBAM) will proceed as scheduled in January.
“The date of coming into effect of CBAM on 1 January 2026 is EU Law. It can only change with a legal proposal by the European Commission and the agreement of the European Parliament and the European Council. There is no such proposal on the table,” said the EU’s Directorate-General for Taxation and Customs Union.
Rumours pervading the market had increasingly suggested that CBAM’s definitive stage – under which imports become fiscally liable for their associated carbon emissions – could be delayed past its January implementation date due to ongoing procedural uncertainties. Some of McCloskey’s sources previously expected that CBAM could be delayed by as much as a year, though the Commission’s reply confirms the position of the opposite camp – that CBAM is now too ingrained to accommodate further delays.
The European steel supply chain has been relatively harmonious in its support for CBAM in principle as a measure to protect Europe’s decarbonising industries, focussing campaigning on practical refinements to the mechanism such as an extension to downstream products, possible export rebates, and circumvention protections. The European Commission’s public consultation on extending CBAM’s scope ends today, 26 August.
However, as CBAM’s definitive stage looms, market participants have been less enthused about the instrument’s practical implementation, lamenting administrative uncertainties still yet to be clarified by the Commission – most prominently the lack of transparency around operative benchmarks in CBAM’s cost formulas that makes it impossible for importers to assess their actual exposure when purchasing international steel.
McCloskey’s sources, particularly in the trade, have been working with estimated values of around 1.3-1.4t/CO2e for blast-furnace route steel basis historical data and tendencies under the Emissions Trading System (ETS), but the actual values are not expected to be released by the European Commission until later this year, or even early 2026. There is also uncertainty surrounding whether steel produced via the electric-arc furnace route will receive its own benchmark classification, as opposed to a single, unified emissions benchmark for international steel.
The industry has previously described the ongoing implementation of CBAM as a “nightmare by nature,” “insane,” “a fiasco” and, most illustratively “a molotov cocktail for the entire supply chain.”
While steel industry associations like EUROMETAL have been loudly proclaiming the difficulties this lack of transparency presents for European importers, these issues have also been highlighted in the EU legislature. Member of the European Parliament (MEP) Filip Turek submitted written questions to the European Commission in mid-July on what measures were being taken to alleviate threats to competitiveness from CBAM cost uncertainties and the non-publication of CBAM’s benchmark values, suggesting a potential dependency between updates to benchmark values for CBAM and those under the ETS, the latter of which Turek does not expect until Spring 2026.
The European Commission commits to replying to written questions within six weeks, which by McCloskey’s estimations sets a 27 August deadline for this potential further clarification.
Benjamin Steven Journalist Steel
