Carbon Border Adjustment Mechanism (CBAM): What customers and importers need to know
As of 1 January 2026, the Carbon Border Adjustment Mechanism (CBAM) has moved from a reporting obligation to a full payment obligation. This means that importers of certain products, including fasteners, must not only report emissions but also purchase and surrender CBAM certificates.
CBAM thereby introduces a mandatory European carbon-related levy on specific imported goods.
What is CBAM?
CBAM is a European regulatory mechanism designed to align carbon pricing inside and outside the EU. Its objective is to prevent unfair competition when production takes place in countries with less stringent climate regulations.
The mechanism imposes a carbon-related levy on goods imported into the EU, based on the embedded CO₂ emissions generated during production.
Within the fastener category, the majority of these emissions arise during steel production processes, such as smelting and rolling. When steel or finished fasteners are produced outside the EU, these emissions fall within the scope of CBAM.
CBAM therefore applies to all EU importers sourcing fasteners from outside the EU.
What changes from 2026?
During the transitional period (2023–2025), only a reporting obligation applied. As of 1 January 2026, a payment obligation also applies.
EU importers are required to:
- Calculate the embedded emissions in imported goods
- Purchase CBAM certificates based on those emissions
- Surrender the certificates annually
- Submit an annual CBAM declaration in line with EU methodology
- Apply default values where verified emissions data is unavailable
CBAM therefore becomes a structural cost component within the import supply chain.
The payable levy will gradually increase until 2034, in parallel with the phase-out of free allowances under the EU Emissions Trading System (EU ETS).
CBAM is a statutory EU obligation that applies to all importers of in-scope products. It is not a discretionary surcharge and is not specific to Fabory: the framework applies across the industry.
What happens in case of non-compliance?
CBAM is enforced under EU legislation and monitored through customs and reporting systems.
Non-compliance may result in:
- Financial penalties
- Administrative sanctions
- Increased scrutiny by authorities
- Restrictions on import activities
CBAM obligations cannot be avoided by restructuring supply chains or changing trading entities. Responsibility remains with the EU importer.
Why this matters for the fastener industry
A significant share of global fastener production and the underlying steel manufacturing takes place outside the EU. CBAM therefore represents a structural change in the regulatory framework of the industry.
The impact is both financial and administrative. Collecting emissions data, engaging suppliers, ensuring correct product classification, managing certificates and complying with reporting obligations require structured internal processes and clear responsibilities.
Importers of fasteners must have:
- Reliable and verifiable emissions data
- Properly established administrative and reporting systems
- The required CBAM authorisation
- Clear internal compliance processes
A professional and timely approach is essential to avoid risks, delays and penalties.
Fabory’s approach
Fabory is fully prepared for the implementation of CBAM and has obtained the necessary authorisations and governance structure to comply with all regulatory obligations.
Our approach includes:
- Official CBAM authorisation
- Active supplier engagement to obtain emissions data
- Accurate product classification and full documentation
- Application of EU-compliant calculation methodologies
- Transparent communication regarding the impact on costs and pricing structures
We provide our customers with continuity, compliance confidence and predictability in a changing regulatory environment.
CBAM fundamentally changes how the import of steel-related products is regulated and priced. Careful preparation and solid governance are essential.
Would you like to understand what CBAM means for your supply chain or future pricing structure? Please contact your Fabory representative.
