CBAM Costs:
Are You Accounting for the Real Impact?
The EU’s Carbon Border Adjustment Mechanism (CBAM), started in 2026, is changing how companies approach pricing, sourcing, and supply chain planning. Importers of carbon-intensive goods entering the EU must now account for the cost of embedded emissions.
This introduces a direct and variable cost that must be reflected in both financial forecasts and commercial decisions. Importers will need to acquire CBAM certificates for emissions associated with products such as steel, aluminium, cement, fertilisers, and electricity, with costs tied to the EU carbon price under the ETS.
CBAM is no longer only a reporting requirement—it is a financial and operational factor that can materially affect margins, supplier decisions, and overall competitiveness.
How CBAM Costs Affect Landed Cost
CBAM adjustment costs are calculated based on the carbon intensity of imported goods, current carbon prices, and benchmarks defined by the EC. The total landed cost of imports now depends on:
- Emissions generated during production
- Carbon pricing applied in the country of origin
- EU carbon price fluctuations
- Industry benchmarcks
Many businesses are already projecting uo to 20% increases in landed costs, depending on supplier emissions and product type. As free EU carbon allowances are phased out, this impact will increase further. CAccounting for these charges is now essential in procurement budgets, pricing models, and financial planning.
Lead Times and Cost Exposure
Supply chains with long lead times face higher exposure to CBAM costs. Procurement and pricing decisions are often made months before goods arrive, while CBAM certificate obligations are calculated closer to import and fluctuate with carbon prices.
This timing gap increases the risk of:
- Margin erosion
- Unplanned cost absorption
- Reduced pricing flexibility
Fixed-price contracts can leave companies unable to recover these costs, potentially impacting profitability.
Forecasting and Cost Control
Accurate forecasting is essential to manage CBAM liabilities. Companies should assess:
- Whether current forecasts include carbon adjustment charges
- The reliability of emissions data from suppliers
- Exposure to carbon price volatility
Without integrating CBAM into forecasting, importers risk underestimating total landed costs, mispricing products, and losing competitiveness in EU markets.
Managing CBAM Costs Across the Supply Chain
Managing these liabilities requires cross-functional alignment between procurement, finance, and supply chain teams:
- Supplier strategy: Prioritise low-emission suppliers and verified emissions data to reduce CBAM liabilities.
- Contract structures: Consider flexible pricing arrangements to mitigate risk from variable CBAM costs.
- Scenario planning: Model potential cost increases (up to 20%) to understand impacts on margins and commercial decisions.
These measures allow companies to proactively manage the financial and operational implications of CBAM.
CBAM Costs as a Strategic Factor
The impact of CBAM extends beyond compliance—it influences strategic decision-making across the business. Importers face:
- Increased administrative and compliance requirements
- Higher landed costs for carbon-intensive goods
- Potential shifts in sourcing strategy to lower-emission suppliers
For sectors such as metals, chemicals, and energy-intensive intermediates, these additional charges may represent a significant component of import economics.
Final Considerations
CBAM costs are now a measurable, material factor in importing carbon-intensive goods into the EU. Companies must ensure:
- CBAM costs are reflected in forecasts and pricing models
- Supply chain exposure is understood and quantified
- Contingency measures are in place for cost volatility
At Carbon Complete, we help businesses anticipate CBAM costs with our CBAM Certificates Cost Forecasting, enabling accurate budgeting and informed decisions to protect margins when importing carbon-intensive goods into the EU.
Contact us to start planning your CBAM strategy today.
