CBAM and stainless steel: your questions answered

CBAM is the EU’s Carbon Border Adjustment Mechanism, designed to prevent carbon leakage by ensuring imported products face a carbon cost comparable to EU-produced goods. It supports the EU’s climate targets by promoting fair competition and encouraging lower-carbon production globally.

CBAM puts a clear carbon price on imported materials such as steel, at the same time as the number of free emissions allowances under the EU Emissions Trading System (ETS) is gradually phased out. Therefore, European steel producers will need to increasingly pay for their direct emissions. 

The amount will however depend on the level of direct emissions – and European stainless steel is significantly lower in emission intensity compared to average imported stainless steel

CBAM currently covers iron and steel (including stainless steel), aluminum, cement, fertilizers, electricity and hydrogen, plus selected precursors. The scope is defined according to CN codes listed in the Annex I of the regulation establishing a carbon border adjustment mechanism (Regulation (EU) 2023/956). Legal Texts covering CBAM regulation are listed on the European Commission’s website.

Coverage depends on customs classification of products, not producer grades. Always confirm your CN code against Annex I and the Commission’s guidance

CBAM applies to specific product categories defined in the regulation under the iron and steel sector. Coverage is based on product classification rather than grade, and customers should verify whether individual products fall within scope. 

The European Commission has published a self-assessment tool to help identify if a product is within the scope of CBAM goods. The tool provides EU importers with the possibility to get a quick overview on whether the imported goods are subject to CBAM during the transitional period, what the CBAM reporting requirements for that particular type of good are, and where to find further information. You will need the to know the Combined Nomenclature (CN) code to use this tool.

The price of CBAM certificates mirror the EU Emissions Trading System (ETS) carbon price, so importers face a similar carbon cost to EU producers. Free allowances for sectors covered by CBAM are being reduced progressively from 2026 to 2034 under the ETS Directive.

Now that the transition period from 2023–2025 (reporting only) is over, importers must buy and surrender CBAM certificates each year starting from 2026, with first payments to be made by the end of September 2027. The sale of CBAM certificates is expected to commence on 1.2.2027. Certificates for a given year of imported goods must be surrendered by end of September of the following year

Included for iron and steel: direct (Scope 1) process emissions and emissions from specified precursors (e.g., ferrochrome, ferronickel, ferromanganese). 

Indirect electricity emissions (Scope 2) are not included for the iron and steel sector at this stage.

SEE are the greenhouse‑gas emissions embedded in producing the imported good.

For calculating the number of required CBAM certificates, importers can use either Default Values or Actual Values as the embedded emissions of their CBAM goods.

Default Values are determined by the EU Commission and are assigned to specific product CN-codes based on their country of origin. 
Actual Values can be applied when the SEE have been calculated under CBAM rules and verified by an accredited third party.

Certificates costs are equal to the number of CBAM certificates that cover the embedded emissions of imported CBAM goods (with possible deductions for the amount of free allowances phased out and recognized carbon costs already paid for in the country of origin) then multiplied by the price of CBAM goods.

Cost = number of CBAM certificates × price of CBAM certificate

Assumptions: Using Default Values, 1t of cold-rolled stainless steel coils from Indonesia in 2026 and 78 €/tCO2 EU price

(Actual specific embedded emissions – (CBAM benchmark x CBAM factor) – (Carbon price already paid on the specific emissions x Actual specific embedded emissions / Price of CBAM certificate)) x Amount of goods

( 9.56 tCO2/t – ( 1.27 tCO2/t x 0.975 ) – ( 0 €/tCO2  x 9.56 tCO2/t / 78 €/tCO2 ) x 1 t of steel

= 8.32 CBAM certificates needed (tCO2)

8.32 CBAM certificates x 78 €/tCO2  = 649 €/t of steel

Yes. If a carbon price (e.g., an ETS or carbon tax) was effectively paid in the country of origin and is recognized under CBAM, that amount can be deducted. This will be subject to evidence that meets CBAM requirements.

he authorized CBAM declarant – typically the importer of record or a person acting on their behalf with proper authorization – is responsible for CBAM declarations and payments. 

The Regulation contains anti‑circumvention provisions (e.g., to address re‑routing or minor processing), and the Commission can investigate and act.

If Actual Values aren’t provided or can’t be verified, authorities may rely on Commission Default Values. Actual Values must be verified by accredited bodies following CBAM rules.

No. CBAM currently applies to the goods listed in Annex I of the CBAM regulation (e.g., defined iron and steel products), not to downstream sector complex goods. The Commission is mandated to assess the extension of CBAM to downstream products; any change would be made through EU legislation. The Commission has made a proposal for such an extension in December 2025.

CBAM adds a carbon cost to higher‑emission imports and increases reporting needs, which can influence import volumes and trade flows. Separately, the EU implements steel safeguard measures (quotas/duties) under trade‑defense rules; any changes there would apply alongside CBAM but are decided through different legal instruments.

CBAM exposure can be reduced by prioritizing lower‑emission supply routes and using supplier‑verified Actual Values to avoid conservative Default Values.

It’s also important to request product‑specific, third‑party‑verified emissions data aligned with CBAM.

Outokumpu’s European steel production is covered by the EU ETS and is therefore not subject to any CBAM costs. In addition, Outokumpu can provide product‑specific, externally verified carbon footprints for its products, to also cover its non-European production.
Based on life-cycle assessments (LCA), Outokumpu’s stainless steel has an average product carbon footprint of approximately 1.6 tCO₂e/t versus a global average of 7.3 tCO₂e/t, and thus over 75% lower. Outokumpu’s Circle Green products can go down to a product carbon footprint of 0.5 tCO₂e/t.

Outokumpu’s European steel production is covered by the EU ETS and is therefore not subject to any CBAM costs. In addition, Outokumpu can provide product‑specific, externally verified carbon footprints for its products, to also cover its non-European production.

Based on life-cycle assessments (LCA), Outokumpu’s stainless steel has an average product carbon footprint of approximately 1.6 tCO₂e/t versus a global average of 7.3 tCO₂e/t, and thus over 75% lower. Outokumpu’s Circle Green products can go down to a product carbon footprint of 0.5 tCO₂e/t.