If you import steel or aluminium into the EU above the 50 tonne de minimis threshold, CBAM applies to you. The financial impact depends on what you import and where it was produced. A tonne of steel from a Turkish electric arc furnace carries a very different CBAM cost than a tonne from a Chinese blast furnace. Getting this distinction right is the first step to managing your compliance cost.
Steel: which products are in scope
Not all steel products are covered by CBAM. Annex I of the CBAM Regulation lists the specific CN codes in scope. The main steel categories covered are:
- Flat-rolled products (hot-rolled and cold-rolled) in iron and non-alloy steel: CN codes 7208, 7209, 7210, 7211, 7212, 7219, 7220
- Bars and rods in iron and non-alloy steel: CN codes 7213, 7214, 7215, 7216
- Wire of iron and non-alloy steel: CN code 7217
- Tubes, pipes, and hollow profiles: CN codes 7304, 7305, 7306
- Screws, bolts, and fasteners from steel: CN code 7318; springs and leaves for springs: CN code 7320
- Pig iron and direct reduced iron (DRI), used in production processes: CN codes 7201, 7203
If your steel product is not in Annex I, it is not currently subject to CBAM, though the Regulation gives the Commission authority to expand the list.
Steel: the production route and emissions difference
Steel is produced via two primary routes, each with very different carbon footprints:
| Production route | Primary input | Typical CO2 intensity | Common countries |
|---|---|---|---|
| Blast furnace / Basic oxygen furnace (BF-BOF) | Iron ore + coking coal | 1.8 – 2.8 tCO2/t steel | China, India, Ukraine, Russia |
| Electric arc furnace (EAF) | Steel scrap | 0.4 – 1.2 tCO2/t steel | Turkey, EU, some US/Brazil |
| Direct reduced iron + EAF (DRI-EAF) | Iron ore + natural gas or hydrogen | 0.4 – 1.5 tCO2/t steel | Middle East, UAE, limited EU |
This difference is significant. If you source your steel from Turkey (predominantly EAF) versus China (predominantly BF-BOF), your CBAM cost per tonne can differ by a factor of two or more, depending on which specific plants supply you. This makes supplier selection a direct lever on your CBAM cost.
Aluminium: scope and the electricity factor
CBAM covers primary aluminium (unwrought, CN 7601), aluminium alloys, flat-rolled products (CN 7606, 7607), aluminium wire (CN 7605), tubes and pipes (CN 7608), and aluminium structures (CN 7610). Secondary aluminium produced entirely from recycled scrap is generally not covered if it meets the definition under the Regulation.
Aluminium is distinct from steel in one important way: indirect emissions from electricity consumption are included in the CBAM calculation. Primary aluminium production via electrolysis is extremely energy-intensive, and the carbon intensity of the grid powering the smelter determines a large part of the embedded emissions.
Aluminium smelted in Iceland using geothermal electricity may have a fraction of the embedded emissions of aluminium smelted in China using coal-fired power, even if the direct process emissions are similar.
The indirect emissions are calculated as: electricity consumption per tonne of aluminium, multiplied by the CO2 emission factor of the country's grid. For countries with coal-dominant grids, this adds substantially to the embedded emissions figure.
Country-specific considerations
Iceland, Liechtenstein, Norway, and Switzerland are exempt from CBAM entirely (goods originating there are outside scope). All other non-EU countries, including the largest steel and aluminium exporters to the EU, are subject to CBAM. Notably:
- Turkey: CBAM applies. Turkey has no ETS equivalent. Mostly EAF steel, relatively low embedded emissions per tonne compared to China.
- China: CBAM applies. Dominant BF-BOF route for steel. Coal-heavy grid for aluminium. High embedded emissions per tonne.
- India: CBAM applies. Mix of BF-BOF and some EAF for steel. Coal-heavy grid.
- Ukraine: CBAM applies. BF-BOF dominant. Post-war infrastructure disruption has affected production efficiency.
What to do now
Identify your steel and aluminium import volumes by CN code and confirm they are listed in Annex I of the CBAM Regulation. For each supplier, find out the production route and request their facility-level emissions data. If you import from multiple countries, map your exposure by source and by production route to understand where your largest CBAM cost concentrations are.
If you have not yet registered as an authorised CBAM declarant, do that before your next shipment. See our guide to the authorised declarant registration process for step-by-step instructions.