CBAM: from a new climate measure to a strategic advantage

The Carbon Border Adjustment Mechanism (CBAM) is now fully in force. For companies with international value chains, this means higher import costs, new reporting obligations and suppliers being asked for CO₂ data with increasing frequency. But CBAM is more than just a compliance challenge. Those who handle it effectively can use it to build a competitive advantage.

‍

In this article, we explain what CBAM actually entails, who it affects and how to approach it strategically.

March 19, 2026

Katelijne Norga

Governance

What is CBAM – and why does it exist?

CBAM attaches a carbon price to certain imported products based on the CO₂ emissions released during their production. The mechanism works via certificates: importers must purchase CBAM certificates corresponding to the embedded emissions in their products.

‍

With CBAM, the EU aims to prevent carbon leakage: the risk that production moves to countries with less stringent climate regulations, meaning global emissions do not fall. In one fell swoop, the system protects European producers who already bear CO₂ costs via the EU ETS against cheap, CO₂-intensive imports.

Wie valt onder CBAM?

The current scope covers sectors with high emission intensity: steel and iron, aluminium, cement, fertilisers, hydrogen and electricity. There is a strong likelihood that CBAM will expand in the coming years to include downstream products such as car parts, machinery and chemicals.

‍

Important: importers who import less than 50 tonnes of CBAM products per year (across all product categories) are exempt from the direct obligation. That may seem like a high threshold, but in practice, most significant import flows are larger. Moreover, this group of larger importers is estimated to account for 99% of all embedded emissions that the legislation aims to regulate.

‍

Three groups are directly or indirectly affected:

‍

Importers bringing CBAM goods into the EU are subject to reporting requirements and must purchase certificates.
Suppliers outside the EU who export to Europe are indirectly impacted via the requirements imposed on them by their European customers. They must also register on the CBAM portal.
Downstream companies – purchasers of CBAM products – face cost increases passed on to them by their suppliers. A manufacturing company that buys steel components, a construction firm that purchases cement: both feel the impact of CBAM in their purchase prices.

From transition phase to financial obligation

The transition phase from 2023 to the end of 2025 was all about learning: quarterly reporting of embedded emissions, without any financial obligation. That phase is now over.

‍

The final rules have been in force since January 2026. Importers report annually and submit CBAM certificates corresponding to the embedded CO₂ emissions in their products – for the first time in 2027 (by 30 September 2027 at the latest) for emissions from 2026. The certificate price is linked to the EU ETS – currently €60 to €80 per tonne of CO₂. Moreover, that price is under upward pressure: the EU ETS is gradually phasing out free emission allowances for European producers, which is expected to drive the carbon price further up. For importers who have to purchase CBAM certificates, this means increasing financial exposure.

‍

A calculation example: Import of 1,000 tonnes of steel with an emission intensity of 2 tonnes of CO₂ per tonne of steel = 2,000 tonnes of CO₂. At €70 per tonne: €140,000 in additional costs. This cost trickles down the supply chain and translates into higher purchase prices, pressure on margins and commercial impact.

‍

Important: importers may be eligible for a deduction if their suppliers can demonstrate that they have already paid CO₂ costs via a carbon pricing mechanism in their home country. Without supporting documentation, this deduction is not possible. An overview of countries with active carbon pricing mechanisms can be found on the World Bank’s Carbon Pricing Dashboard. Those who have their supplier data in order will save costs.

Three challenges companies face

1. Data transparency

‍

Collecting reliable emissions data from suppliers – often on other continents – is more complex than it sounds. Suppliers use different methodologies, do not always have reliable CO₂ data, or are unwilling to share sensitive production information. Using default values is permitted, but usually leads to higher certificate costs.

‍

2. Supply chain strategy

‍

CBAM forces companies to assess suppliers not only on price and quality, but also on CO₂ intensity. This raises strategic questions: do you stick with existing suppliers and bear the CBAM cost? Do you invest in joint reduction programmes? Or do you switch to greener alternatives, which are often more expensive but entail a lower CBAM burden?

‍

3. Financial and commercial impact

‍

Integrating CO₂ costs into pricing models and quotations is new territory for many companies. Those who do not do this proactively will be caught off guard – by suppliers passing on costs, or by customers who did not expect a CBAM surcharge.

Why CBAM is a tipping point for procurement and ESG

CBAM makes CO₂ performance economically relevant in a way that was previously only visible in voluntary sustainability reports. This has three structural consequences.

‍

CO₂ is becoming a procurement criterion. From now on, it is not just price and quality, but also emission intensity that determines supplier choices. Procurement departments must integrate the carbon footprint into tenders and supplier evaluations.

‍

Supply chain relationships are becoming more strategic. Companies must collaborate more closely with suppliers on data sharing and joint reduction programmes. This requires long-term relationships and mutual trust.

‍

Climate is becoming a competitive factor. Companies with low CO₂ intensity in their supply chain gain a structural advantage: lower CBAM costs, a stronger market position and greater appeal to customers with their own climate targets.

How can you best prepare today?

A strong CBAM approach combines three elements:

‍

Understanding the regulations. Know what is mandatory today and what may be added tomorrow. Monitor EU updates and implementing regulations.

‍

Data maturity. Collect reliable emissions data at the supply chain level. Invest in supplier engagement, data validation and systems. Treat default values as a temporary solution, not as an end point. Also bear in mind the verification requirement: embedded emissions must be verified by an accredited third party. Engage with accredited verifiers in good time, as demand for these services is growing rapidly.

‍

Strategic integration. Integrate climate considerations into your procurement processes, financial management and strategy. Make CBAM part of your broader ESG and business strategy.

‍

Practical first steps:

‍

Identify which products and materials fall under CBAM
Map out your current suppliers and their CO₂ intensity
Initiate a dialogue with key suppliers regarding data exchange
Calculate the potential CBAM costs
Evaluate alternative sourcing options
Integrate CBAM into contract templates and procurement processes

Conclusion: from compliance to competitive advantage

CBAM is not purely a customs or compliance issue. It is a signal that carbon performance is becoming a structural factor in international trade and competitiveness – and that pressure is mounting. As the EU ETS further reduces free emission allowances for European producers, the underlying carbon price rises. This makes a proactive approach not only sensible, but increasingly urgent.

‍

The impact goes beyond import costs. CBAM is forcing companies to integrate climate considerations into sourcing, financial planning, supplier relationships and product strategy. Companies that tackle this strategically today are building resilience, market relevance and future value.

Many companies still underestimate how significantly CBAM could affect their supply chain and cost structure. A targeted impact analysis provides insight within 2 to 3 weeks into which products and suppliers pose the highest risk – and which actions yield the greatest returns.

‍

→Request the CBAM impact analysis

→Schedule a free introductory meeting

CBAM: from a new climate measure to a strategic advantage

What is CBAM – and why does it exist?

Wie valt onder CBAM?

From transition phase to financial obligation

Three challenges companies face

Why CBAM is a tipping point for procurement and ESG

How can you best prepare today?

Conclusion: from compliance to competitive advantage

Most recent

CBAM: from a new climate measure to a strategic advantage

Why CO₂ targets are not yet a climate strategy

Double materiality analysis: from check-box to strategic compass

CBAM: from a new climate measure to a strategic advantage

What is CBAM – and why does it exist?

Wie valt onder CBAM?

From transition phase to financial obligation

Three challenges companies face

Why CBAM is a tipping point for procurement and ESG

How can you best prepare today?

Conclusion: from compliance to competitive advantage

Share this article

Most recent

CBAM: from a new climate measure to a strategic advantage

Why CO₂ targets are not yet a climate strategy

Double materiality analysis: from check-box to strategic compass