Starting 1 January 2026, the European Union will introduce a new CO₂ levy: the Carbon Border Adjustment Mechanism (CBAM). This measure, known as the CBAM levy, aims to ensure fair competition between European manufacturers and companies outside the EU.
For the wire industry – which relies heavily on steel and aluminium – this will have a direct impact. Not only in terms of reporting obligations, but also financially. Importing materials from outside Europe will soon mean higher costs.
Why the CBAM levy was introduced
Within the EU, producers have long been required to pay for their CO₂ emissions through the EU Emissions Trading System (EU ETS). Outside the EU, this is not always the case – meaning that non-European products are often cheaper simply because they don’t include the environmental cost of production.
This creates unfair competition and leads to so-called carbon leakage: when companies relocate production to countries with less strict climate rules.
To prevent that, the European Commission introduced the Carbon Border Adjustment Mechanism – a CO₂ levy on imported goods such as steel, aluminium, cement, fertilisers, electricity and hydrogen.
Two phases: from reporting to paying
CBAM will be rolled out in two phases:
Transitional phase (1 October 2023 – 31 December 2025)
During this period, importers must report quarterly how much CO₂ was emitted during the production of imported CBAM goods. No payments are required yet, but reporting is mandatory.Full implementation (from 1 January 2026)
From this date, authorised CBAM declarants must also start paying. They will purchase CBAM certificates – one certificate per tonne of CO₂ – and submit them annually. The certificate price will be linked to the CO₂ price under the EU ETS.
From 2026 onwards, a threshold of 50 tonnes of CBAM goods per importer per calendar year will apply. Companies importing less than that amount are exempt from the requirements.
To import CBAM goods in 2026, companies must apply for CBAM authorisation from the Dutch Emissions Authority (NEa) before 1 September 2025. Processing can take up to 120 days. Without this authorisation, importers cannot bring CBAM goods into the EU – and shipments may be held at the border.
What CBAM means for the wire industry
The wire industry is highly dependent on steel and aluminium, both of which fall directly under CBAM. In practice, this means:
Importers of wire, steel wire, semi-finished products or raw materials from outside Europe will, from 2026 onwards, have to pay for the CO₂ emissions generated during production.
This will lead to higher import costs, especially for materials sourced from countries without a carbon pricing system.
European manufacturers already participating in the ETS will therefore gain a fairer competitive position.
For wire companies that rely on imports from outside the EU, CBAM will increase the total cost of raw materials and semi-finished products. Availability may also be affected if importers choose to adjust their sourcing strategy.
How to prepare
CBAM is not an abstract policy topic – it will directly affect purchasing, logistics and pricing in the wire industry. Here are some practical steps:
Map your import flows.
Identify which materials or semi-finished products come from outside the EU.Request emission data from suppliers.
Suppliers must provide verified CO₂ emission data for their production processes.Apply for CBAM authorisation on time.
To avoid delays, it was recommended that applications be submitted well before 1 September 2025.Plan for higher costs.
From 2026, importers themselves will pay the levy, which may affect end prices.Consider EU-based alternatives.
European suppliers are already covered by the ETS system and are generally better prepared for CBAM requirements.
CBAM rewards sustainable production
The Carbon Border Adjustment Mechanism is designed not only to protect European industry, but also to encourage companies worldwide to reduce their emissions.
Producers who already account for CO₂ costs – or who have lower emissions – will gain a financial advantage. In that sense, CBAM rewards sustainable production, creating a more level and transparent market.
CBAM at a glance
Item | What it means | |
What is CBAM? | EU carbon levy on imported goods (steel, aluminium, cement, fertilisers, electricity, hydrogen). | |
Purpose | To create a level playing field between European and non-European producers. | |
Phase 1 | Transitional phase: 1 October 2023 – 31 December 2025 (reporting obligation). | |
Phase 2 | Full implementation: from 1 January 2026 (payment via CO₂ certificates). | |
Threshold | 50 tonnes of CBAM goods per importer per calendar year. | |
Authorisation | Apply before 1 September 2025 via the Dutch Emissions Authority (NEa). | |
Without authorisation | Risk of fines or blocked shipments at customs. |
Want to know more about CBAM and its impact on your wire products?
Metalwire closely follows developments around CBAM. Contact us for more information or tailored advice on how this regulation may affect your import flows and wire products.
.jpg)
.jpg)