CBAM Is Live — What It Means If Your Customer Exports to the EU

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· 5 min read

EU CBAM is fully operational as of 1 January 2026. If you supply to a manufacturer who exports to the EU, the emissions data request is already on its way down the supply chain. This is not a regulatory pressure on you directly—yet. This is a procurement conversation.

The commercial trigger: the data cascade

The Carbon Border Adjustment Mechanism applies directly to importers of carbon-intensive goods into the EU. The covered products are: iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. If your customer manufactures any of these, or uses them heavily in their own production, CBAM is their problem.

But here's the mechanics. EU importers now face two routes to compliance:

  1. Use actual emissions data from their supply chain. They pay duty only on their verified direct and embedded emissions.
  2. Use EU default values. If they cannot verify their suppliers' emissions, they pay duty on a preset carbon intensity figure—plus a 10% markup for uncertainty.

That 10% markup isn't ornamental. On a tonne of embedded carbon in steel, it adds real cost. From 2027, it becomes 20%. By 2028, it's 30%.

The result: manufacturers who export to the EU have a commercial incentive to collect actual emissions data from every tier of their supply chain. They will ask you for your Scope 1 and Scope 2 emissions (direct emissions and energy purchases), and often Scope 3 (upstream emissions in your own supply chain). If you cannot provide verified data, they will use the default figure instead—but they'll flag that they've done so to the EU authorities, which creates audit risk for them. They prefer you to measure.