The EU confirms CBAM rollout in January 2026 in an answer to a question from Eurometal. The Directorate-General for Taxation and Customs Union (DG TAXUD) confirmed that the deadline is set by EU law and cannot be altered without new legislation being enacted. Although the steel industry generally endorses CBAM as a safeguard against carbon leakage, essential stakeholders are raising concerns regarding the lack of transparency surrounding the mechanism’s actual operation.

Uncertainty Clouds Steel Sector Ahead of 2026

The EU confirms CBAM rollout in January 2026, although the CBAM aims to level the playing field by matching the expenses suffered by EU producers under the Emissions Trading System (ETS) by imposing a carbon penalty on imports of energy-intensive items, such as steel. The scheme is a vital safety net for European steel producers as they switch to low-carbon production techniques. However, administrative details are still pending as the start date approaches, leaving industry participants uncertain.

The lack of transparency on the operational benchmarks that would serve as the foundation for CBAM cost calculations has been brought to the attention of market analysts. It is anticipated that these benchmarks, which are used to quantify carbon emissions contained in imports, will be released later this year or early in 2026. Whether steel made in Electric Arc Furnaces (EAF), which often emit less carbon than traditional blast furnaces, will be given its own benchmark categorization is a controversial topic. EAF-based producers worry about being unfairly penalized by a system that overlooks their reduced carbon intensity in the absence of such a distinction.

According to IndexBox data, trade flows for carbon-intensive items would be drastically changed by the CBAM, which could change the competitive landscape of the EU market. To prepare price strategies and supply chain adjustments before the implementation, steel distributors and importers must have a thorough grasp of how these costs will be determined.

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Legislative Certainty vs. Practical Concerns

DG TAXUD has emphasized that there are no plans to change the January 2026 implementation date, which is set in stone by EU law. However, market debates remain centered on the potential for administrative hold-ups at the CBAM financing stage, when importers will have to relinquish certificates to cover embedded carbon emissions. Stakeholders contend that when the system goes live, the lack of clear regulations could lead to congestion.

The European Commission launched consultations on three necessary implementing acts at the end of August. These acts aim to clarify the calculation of embedded emissions, the accounting for free permits under the EU ETS, and the reduction of CBAM obligations in cases where importers can demonstrate that a carbon price was previously paid in the country of origin. Industry experts emphasize the need for more transparency and a quicker pace to prevent a disorderly deployment, even though these consultations are a positive beginning.

The steel industry still supports the CBAM concept for the time being, but it maintains that more precise regulations are necessary to guarantee a just and efficient transition. The countdown to implementation is getting closer, and pleas for assurance are getting louder as the two-year mark approaches.

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