If you're a non-EU supplier of steel, cement, aluminum, fertilizers, or hydrogen, CBAM affects you even though you're not the one paying the carbon tax. Here's why you should care - and how to turn it into a competitive advantage.
Why CBAM Matters for Suppliers
Your EU customers will pay carbon taxes on your products starting January 1, 2026. The amount they pay depends on your emissions.
The math is simple:
Lower emissions → Lower customer CBAM cost → More competitive pricing → More sales
The Default Factor Problem
If you don't provide emissions data, EU importers must use default factors set by the EU. These defaults:
- Are based on country and product averages
- Include a 20% penalty markup
- Are usually higher than actual emissions from efficient producers
Example: Turkish steel producer
- Your actual emissions: 1.85 tCO₂e/tonne
- EU default for Turkey: 2.34 tCO₂e/tonne
- You're being charged 26% more than your actual emissions
For a 1,000-tonne shipment in 2026:
- Default CBAM cost to customer: €4,680
- Actual CBAM cost (if verified): €3,700
- Customer saves: €980
By 2034 (when free allocation ends), this saving becomes €39,200 per shipment.
Three Steps to CBAM Competitive Advantage
Step 1: Calculate Your Actual Emissions
You need to know your product-specific emissions covering direct emissions (fuel combustion, process emissions) and indirect emissions (purchased electricity, heat/steam).
Use our free calculator as a starting point. Full calculation requires production data and methodology knowledge.
Step 2: Decide on Verification
Once you know your emissions, decide whether to get them independently verified.
When verification makes sense:
- Your emissions are >15% below EU defaults
- You export >500 tonnes annually to EU
- You have long-term EU customers
- You want to market yourself as low-carbon
Verification costs:
- Small facility: €2,000-€5,000
- Medium facility: €5,000-€15,000
- Large facility: €15,000-€50,000
Step 3: Communicate Value to Customers
Don't just send emissions data - frame it as a value proposition.
Good approach:
"Our verified emissions are 1.85 tCO₂e/tonne, which is 21% below the EU default. This could save you €980 per 1,000-tonne shipment in 2026, growing to €39,200 by 2034 as free allocation phases out."
Include comparison to EU default, absolute savings in euros, and multi-year projections.
Real-World Example
Egyptian cement producer:
- 10,000 tonnes/year to EU
- Actual emissions: 0.85 tCO₂e/tonne
- EU default: 0.96 tCO₂e/tonne
Action taken:
- Calculated emissions using CBAM methodology
- Hired local verifier (cost: €5,000)
- Obtained verification statement
- Shared verified data with EU customers
Results:
- 2026 CBAM savings for customers: €2,200 total
- 2034 CBAM savings for customers: €88,000 total
- Won 3 new customers comparing suppliers
Your Action Plan
This month:
- Calculate your actual emissions
- Compare to EU defaults
- Estimate CBAM cost difference
Next month:
- Contact verifier if emissions are >15% below defaults
- Prepare production data
- Create customer communication materials
Before CBAM starts:
- Complete verification if pursuing
- Send verified data to all EU customers
- Update sales materials with carbon advantage