CBAM is no longer a future risk. It is a 2026 cost.

The EU Carbon Border Adjustment Mechanism moved into its definitive period on 1 January 2026. In April the European Commission published the first quarterly certificate price: €75.36 per tonne of CO₂e for Q1 2026, followed by €75.28 for Q2. Imports of iron and steel, aluminium, cement, fertilisers, hydrogen and electricity now carry a financial obligation, not only a reporting one. Importers buy and surrender certificates from February 2027 for goods imported during 2026.

What most Taiwanese manufacturers are missing

The declarant is the EU importer, but the numbers have to come from the factory. When a producer cannot supply verified actual emissions, the importer falls back on default values, and those are designed to be the expensive route:

• Default values carry a mark-up for steel, aluminium, cement and hydrogen: 10% in 2026, 20% in 2027 and 30% from 2028.
• The deduction for EU free allocation is calculated on a different benchmark, which is usually less favourable than with actual data.

You will see very large cost gaps quoted online. Many of those figures skip the free allocation adjustment, which in 2026 still offsets most of the benchmark (the CBAM factor is 97.5%). The real gap is smaller, but it is still big enough to decide who keeps an EU customer.

A worked example: 800 tonnes of carbon steel screws

Fasteners are one of Taiwan's largest exports exposed to CBAM. Take a plant shipping 800 tonnes of carbon steel self-tapping screws (CN 7318 14 99) to the EU in 2026:

Same product, same shipment, roughly 2.6 times the bill. And the gap widens every year: the default mark-up rises to 30% in 2028, while the free allocation factor falls to 90% in 2028 and reaches zero in 2034.

The actual-data column uses an illustrative plant profile (natural gas, diesel, grid electricity and a wire rod precursor) from the CBAM calculation tool we use with clients. Default values are the Taiwan values under Implementing Regulation (EU) 2026/1740, and the free allocation deduction follows (EU) 2025/2620. Your own figures will differ.

2028: the scope is set to reach further downstream

In December 2025 the Commission proposed extending CBAM from 1 January 2028 to around 180 steel- and aluminium-intensive downstream products, including machinery, hardware and fabrications, vehicle components, domestic appliances and construction equipment. For these goods, emissions would be attributed to the steel and aluminium they contain.

This is still a proposal. The Council agreed its position in June 2026, and the text still has to go through the European Parliament before it can be adopted. Meanwhile, many metal goods that Taiwanese fabricators ship are already covered today, including fasteners (CN 7318) and containers for compressed or liquefied gas (CN 7311). If your product contains steel and goes to Europe, check the CN code now rather than in 2028.

The data does not come from your ERP

An ERP knows how many tonnes left the gate. CBAM needs installation-level emissions: fuels, process emissions, electricity and precursors, allocated to production processes, traceable to your actual operations and checked by an accredited verifier. Setting that up for the first time usually takes longer than companies expect.

1. List the CN codes you ship to the EU and the importers who declare them.
2. Define the installation boundary and production processes for each product.
3. Collect activity data, and request emissions data from precursor suppliers such as wire rod or aluminium billet producers.
4. Calculate embedded emissions and prepare the evidence a verifier will ask for.
5. Share the results with your EU importers in a format they can use for their declaration.

Under CBAM, the cheapest tonne of carbon is the one you can prove.

Sources: European Commission, price of CBAM certificates; Implementing Regulations (EU) 2025/2620 and (EU) 2026/1740; Commission proposal on the CBAM downstream extension (December 2025) and Council position (June 2026).