[SMM Iron & Steel] EU Carbon Border Adjustment Mechanism (CBAM) Enters Definitive Regime

Published: Jan 5, 2026 10:06

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On January 1, 2026, the European Union's Carbon Border Adjustment Mechanism (CBAM) officially transitioned from its reporting-only phase to its definitive regime. Importers of iron, steel, and specific downstream products are now required to purchase CBAM certificates to cover the carbon emissions embedded in their goods, effectively linking import costs to the EU Emissions Trading System (ETS) price. This structural shift is expected to impose a financial burden on high-emission producers, particularly those utilizing traditional blast furnace routes in India and Southeast Asia, while incentivizing the global trade of green steel and Direct Reduced Iron (DRI).

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