EU companies prepare for full implementation of CBAM in 2026

Business studies the specifics of the mechanism and accelerates decarbonization efforts

European companies are currently scrutinizing the specifics of carbon border adjustment mechanism (CBAM) to ensure compliance with it. It is reported by Euractiv.

Many companies are said to have invested in legal and advisory services to understand the regulatory framework and its impact on their supply chains. Understanding the carbon intensity of imports is crucial, as businesses will need to report the emissions associated with it.

CBAM will have a significant impact on the metallurgical sector, as its scope includes some materials for the six industries currently covered by the mechanism.

As Pablo Rodríguez Domínguez, a sustainability specialist at the Nickel Institute, explained, in the steel industry, some ferroalloys used in the production of stainless steel, including ferronickel, fall under the CBAM. The expert notes that companies importing it into the EU from the end of January this year should report their embedded emissions, and from 2026 – to buy CBAM certificates.

In addition to reducing the costs associated with the mechanism, many companies are accelerating their efforts to decarbonize. By reducing their own carbon emissions, they can minimize the number of certificates required. It is about investing in renewable energy, improving efficiency and researching innovative technologies. For steel sector, this approach requires a fairly large investment.

Calculating embedded emissions is not an easy task and requires multiple data points that companies may not have on hand, Rodriguez Dominguez said. The process is also very different from other current greenhouse gas calculations that are made in the industrial industry.

CBAM also requires companies to create and implement new business processes to manage relevant reporting, including new staff responsibilities.

As the deadline for the full application of the mechanism approaches in 2026, companies are beginning the process of re-evaluating the supply chain and collaborating to track and control, looking for sources of materials and products from regions with strict climate standards or those using sustainable practices.

European manufacturers are also expanding cooperation with suppliers to increase transparency about emissions data.

In addition to organizational issues, there are several points that need to be addressed. For example, we are talking about the disclosure of confidential business information through CBAM. Also, the system for providing data on the mechanism portal remains not entirely clear, and company reviews show that there are various possibilities for interpreting the requirements.

As GMK Center reported earlier, the European cross-border carbon adjustment mechanism encourages other countries to introduce their own border carbon charges, while others are considering retaliatory measures.