The Carbon Border Adjustment Mechanism (CBAM) completed its two-year transitional reporting phase on 31 December 2025 and entered the financial phase on 1 January 2026. Under this regime, EU importers of covered goods must surrender CBAM certificates equal to the embedded direct and indirect carbon emissions of each imported product, priced at the weekly EU Emissions Trading System (ETS) auction settlement. Q2 2026 EU ETS prices have traded in a €70–€80/tCO₂e corridor, with peak values of €85 in May 2026.
Initial scope and the 2026 expansion. From 1 Jan 2026 the covered CN codes include iron, steel, aluminum, cement, fertilisers, hydrogen, and electricity. From 15 May 2026, the European Commission extended coverage to downstream steel and aluminum components under Commission Implementing Regulation (EU) 2025/2581 — explicitly capturing HS 8211 (sets of assorted cutlery), HS 8215 (spoons, forks, ladles, skimmers), and aluminium cookware under HS 7615. Imports exceeding 50 tonnes/year per importer trigger full CBAM financial liability; smaller importers are exempt from financial surrender but must still report.
Quantitative cost impact on a representative shipment. A 40HQ FCL of 304 stainless steel cutlery weighs ~18,000 kg. Embedded emissions of Chinese BF-BOF stainless are typically 1.8–2.5 tCO₂e per tonne, while EAF-route stainless (Indonesia, Turkey, Spain) is 0.6–1.0 tCO₂e per tonne. At €75/tCO₂e, the CBAM levy per FCL is:
| Steel source | Emission factor | CBAM levy / FCL @ €75 | As % of FOB value |
|---|---|---|---|
| China BF-BOF | 2.2 tCO₂e/t | ~€2,970 | 3.0–4.0% |
| Indonesia EAF | 0.8 tCO₂e/t | ~€1,080 | 1.1–1.4% |
| EU benchmark (free allocation) | 0.0 tCO₂e/t | €0 | 0% |
Practical recommendations for buyers. (1) Request the upstream mill's verified emission data — only an EU-accredited verifier's report is accepted by the Commission. (2) Where HTS classification is borderline, apply for a Binding Tariff Information (BTI) ruling from a member state customs authority. (3) Consider a low-carbon premium for EAF-route stainless: at the €75/tCO₂e level, a 60% reduction in emissions translates to ~€1,890/FCL savings, which can be split between the supplier, the importer, and the end buyer.
What we are doing at WanLong. We are working with our upstream steel mills to obtain mill-specific verified emission data (ISO 14064-3) and pass CBAM costs through transparently. For buyers targeting low-carbon stainless, our partner mills in Indonesia and Turkey can deliver EAF-route 304 at FOB pricing within 3% of the Chinese BF-BOF equivalent.
Source: Regulation (EU) 2023/956 (CBAM); Commission Implementing Regulation (EU) 2025/2581; European Commission DG TAXUD public register
Want a compliance or sourcing brief on this topic?
We prepare country-specific impact analyses for our buyers. Share your target market, product category, and timeline — we will send back a tailored brief.
Request a Brief