New EU Carbon Charges Could Increase the Cost of Metal Products

The carbon border tax is closing in on a merchant’s metal racks, one product tier at a time. Basic iron and steel fasteners (screws, bolts and nuts under code CN 7318) have been inside the Carbon Border Adjustment Mechanism (CBAM) since its transitional phase began in 2023, and since 1 January 2026 they have sat in the definitive, paying phase. What escaped, until now, was the more heavily manufactured tier: complex structural assemblies, aluminium articles, cables and machined parts. On 12 June 2026, the EU’s Economic and Financial Affairs Council (ECOFIN) agreed its position to close that gap, extending CBAM to a long list of downstream steel and aluminium products. The new obligations are set to apply from 1 January 2028.

So the headline is not that screws are suddenly taxed; they already are. It is that the workaround of importing lightly transformed metal goods to stay outside the net is ending, and the charge on the basic fasteners merchants already stock is now live rather than theoretical. CBAM has been in its definitive phase since 1 January 2026, covering iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. Importers above the 50-tonne annual threshold report embedded emissions and surrender certificates priced against the EU carbon market.

The question on the desk. Most merchants are not the importer of record. So why does a border tax threaten your margin? Because the cost reaches you through your suppliers, and the data your contractor customers now demand reaches you the same way.

What lands on the racks

The European Commission’s proposal, published on 17 December 2025, adds 180 steel- and aluminium-intensive downstream products to CBAM from 1 January 2028. They were chosen because they combine a high carbon-leakage risk with a high metal content. The newly captured categories that matter to a builders’ merchant include structures and parts of structures such as lintels, framing and prepared plates (CN 7308); aluminium structures and components (CN 7610); and stranded wire, cables and more complex fabricated metal articles, plus machinery and appliance components with high steel or aluminium content.

Basic iron and steel fasteners under CN 7318 are not on this new list because they are already inside CBAM. The 2028 extension is about the tier above them: the structural and fabricated goods that, until now, entered the EU without a carbon charge. There is also a reprieve on the heavy side. The extension covers steel and aluminium only; a downstream extension into cement, fertilisers and hydrogen has been deferred to a future review. So concrete, plasterboard and aggregate buyers are not in this net yet.

The dual cost-push

The squeeze comes from two directions at once. First, domestic European manufacturers face their own rising costs as free carbon allowances under the EU Emissions Trading System (ETS) are phased out in step with CBAM. As that cushion disappears, European producers of fasteners and structural steel raise prices to cover their carbon bill.

Second, the cheap import loses its edge. From 2028, a non-EU manufacturer shipping finished hardware into the EU must carry a CBAM charge equal to the EU carbon price. With ETS allowances trading around €80 per tonne of CO₂ in mid-2026, the penalty on carbon-heavy imported steel is material, not marginal. The price gap that made distant sourcing attractive narrows or vanishes.

The scrap rule that shuts the back door

The proposal also tightens how emissions are counted, and this matters for a merchant chasing a low number. Pre-consumer scrap, the offcuts generated inside a factory, is treated as a carbon-carrying input. Post-consumer scrap, the genuinely recycled end-of-life metal, is deliberately left out so the rules do not penalise the circular economy.

The effect is to remove a favourite escape route. A non-EU supplier can no longer wave away a footprint with a vague “made from recycled scrap” line. Where verified data is missing, high default values apply, set deliberately high to penalise the gaps. Which suppliers can actually hand you verified emissions data, and which are about to become a liability?

Where this connects: the data follows the metal to the jobsite

CBAM does not sit in isolation. It feeds straight into the building-level rules. Under the recast Energy Performance of Buildings Directive (EPBD) and the recast Construction Products Regulation (CPR), whole-life carbon reporting is arriving for new buildings, so contractors no longer just buy a bracket. They buy the data that lets them calculate the building’s lifetime emissions.

That produces a double bind for undocumented imported stock. The product costs more once the carbon charge is in, and a contractor working to an EPBD carbon budget cannot use a structural element that arrives without a verified Environmental Product Declaration (EPD). Stock without data is not only expensive. For regulated projects, it is unsellable.

What merchants can do now

Audit your steel and aluminium exposure across both tiers. Map the fasteners under CN 7318 that already carry a CBAM charge, and the structural and fabricated lines under CN 7308 and CN 7610 that join in 2028. Note which are sourced from outside the EU, directly or via a distributor, and where the metal is melted.

Demand carbon data now, not in 2028. Ask suppliers for verified embedded-emissions figures and proof of scrap origin. A supplier who cannot tell you the footprint of a screw today will not be ready when the charge bites.

Stress-test the cheap-import margin. Re-run category margins with a projected certificate cost on landed price. On several lines, a European or certified low-carbon source becomes the lower-risk, lower-total-cost option.

Arm the counter. Train commercial teams to explain why imported hardware prices move, and to position verified low-carbon ranges as the answer for contractors bound by EPBD reporting.

The risk is real, but so is the opening. The merchant who locks in verified, low-carbon supply early protects margin against the 2028 charge and becomes the preferred partner for every contractor who now has to report the carbon in a steel beam. Carbon data becomes as decisive as price and lead time.

Market developments

In focus: Low-carbon steel scales toward commercial volume. As carbon-heavy imports lose their price edge, European producers are positioning compliant alternatives. Swedish producer Stegra (formerly H2 Green Steel) is building a green-hydrogen steel plant at Boden in northern Sweden, aimed at near-zero-emission structural steel; the company’s own materials describe commercial-scale ambitions this decade. The emissions figures are Stegra’s own claim until third-party verified, but the direction gives merchants a documented, CBAM-resilient source to qualify now.

In focus: Verified EPDs already exist on the fastener shelf. On the hardware side, specialist fastener makers are publishing third-party-verified EPDs and moving to green-steel wire rod. That gives merchants a product which solves two problems in one purchase order: it insulates landed cost from the CBAM charge, and it hands the contractor the carbon data their own EPBD reporting requires. For procurement, a verified EPD is a commercial asset, not a compliance nicety.

Sources

Council of the European Union. ECOFIN meeting, CBAM general approach, 12 June 2026 (OFFICIAL). https://www.consilium.europa.eu/en/meetings/ecofin/2026/06/12/

European Commission. Proposal amending Regulation (EU) 2023/956 as regards downstream goods (COM(2025) 989 final), 17 December 2025 (OFFICIAL). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025PC0989

European Commission, DG TAXUD. CBAM definitive regime, sectors in scope, 50-tonne threshold (OFFICIAL). https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

ICAP. EU CBAM enters compliance phase (180 downstream products; pre-consumer scrap; 1 Jan 2028 start) (AUTHORITATIVE, attributed). https://icapcarbonaction.com/en/news/eu-cbam-enters-compliance-phase-and-outlines-path-ahead