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Starting January 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) regulation will fundamentally change the economics of global trade. For metals suppliers and buyers, this shift brings immediate CBAM exposure that will translate into a real cost structure, directly influencing margins, competitiveness and supply chain strategy. Carbon intensity is no longer just a disclosure metric, it is becoming a key determinant of market access and profitability.
The transition from policy to financial reality is underway, and the implications of CBAM regulation are now shaping procurement decisions across metals supply chains. Importers are actively assessing their CBAM exposure, and producers are re-evaluating assets based on their emissions footprint.
To help leaders navigate this new landscape, Fastmarkets’ experts have created a new forecast report, Margins on the line: CBAM insights for metals suppliers and buyers. This article summarizes some of the key findings and what they mean for your business.
CBAM regulation imposes a carbon charge on imports of steel, aluminium, cement, fertilizers, electricity, and hydrogen, based on their embedded emissions. This charge is linked to the market price of European Union Allowances (EUAs). From 2026, importers must purchase and surrender CBAM certificates to cover these emissions.
This obligation will be phased in as the free allowances under the EU Emissions Trading System (ETS) are phased out, reaching full effect by 2034. As the supply of EUAs tightens, prices are expected to rise. Fastmarkets analysis projects the EUA price will increase from around €70–75 per tonne in 2025 to approximately €130 per tonne by 2030. This rising cost will be directly transferred to importers of carbon-intensive goods.
The report finds that by 2034, carbon costs will represent a material share of import value for most CBAM-covered goods. This will redefine cost competitiveness, making carbon efficiency as critical as traditional drivers like labor, energy, and logistics.
The iron and steel sector faces the most significant carbon border exposure, accounting for roughly 75% of potential CBAM liabilities. Aluminium is a distant second.
CBAM’s impact is not evenly distributed. The CBAM report highlights that over half of projected CBAM costs by 2030 will be tied to exports from just five countries: India, Türkiye, China, Ukraine, and Russia.
India, for example, is expected to bear 18% of total CBAM costs, nearly double its share of EU import value. This is due to its reliance on blast furnace steelmaking and the absence of a domestic carbon price. In contrast, countries with cleaner production methods, like the US and South Korea, will gain a competitive edge.
For buyers, this concentration of liability creates new geopolitical and trade-related risks. It is now crucial to map supplier exposure not just by facility, but by jurisdiction, and to anticipate how trade patterns might shift in response to these new cost pressures.
CBAM is not just a compliance exercise, it is the architecture through which the EU is exporting its carbon price to global trade. For any business involved in the metals supply chain, carbon now sits on the balance sheet.
The Margins on the line report provides commercial, procurement, and finance leaders with a quantified view of CBAM exposure across steel and aluminium supply chains. It translates complex regulatory risk into actionable insights, helping you to refine strategy, manage costs, and maintain a competitive advantage.
If you want to sanity-check your CBAM exposure assumptions against your supplier mix and routes with our latest EU ETS price modelling, speak with our carbon team.
Download the full forecast report to to benchmark supplier routes, quantify 2026–2035 liabilities, and stress-test country-level and product-level exposure