Regulation · EU · 2026
CBAM and construction materials — what you need to know
The EU Carbon Border Adjustment Mechanism entered its definitive regime in January 2026. If your business imports steel, cement, or aluminium into the EU, you now face direct financial obligations tied to the embedded carbon in those materials. This page explains what CBAM means, which materials are in scope, and what carbon data is required.
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CBAM definitive regime started 1 January 2026. Importers above the 50-tonne threshold must now be authorised CBAM declarants and purchase certificates proportional to embedded emissions. Annual declarations due 30 September each year.
What is CBAM?
CBAM — the Carbon Border Adjustment Mechanism — is an EU regulation that puts a carbon price on certain goods imported into the European Union. It mirrors the EU Emissions Trading System (EU ETS), under which EU manufacturers already pay for every tonne of carbon they emit. CBAM ensures that importers of equivalent goods from outside the EU face the same carbon cost, preventing what regulators call "carbon leakage" — where production simply moves to countries with weaker climate regulations.
In practical terms: if you import steel into the EU, you must now purchase CBAM certificates proportional to the embedded carbon in that steel. The certificate price tracks the EU ETS carbon price, which has historically ranged between €50–€100 per tonne of CO₂e.
ℹ CBAM is not a tax. It is a carbon intensity equaliser — it applies the EU carbon price consistently to both domestic producers and importers. Companies in countries with equivalent carbon pricing (currently Iceland, Norway, Liechtenstein, and Switzerland) are exempt.
Which materials are in scope?
CBAM currently covers six sectors. Three of them are directly relevant to construction:
| Sector | In scope | Relevant to construction | Notes |
|---|
| Iron & steel | ✓ Yes | ✓ Structural steel, rebar, sections | Most carbon-intensive common structural material |
| Cement | ✓ Yes | ✓ Portland cement, blended cements | Covers clinker and cement products |
| Aluminium | ✓ Yes | ✓ Facades, windows, cladding, MEP | Primary aluminium has very high embedded carbon |
| Fertilisers | ✓ Yes | ✗ Not typically relevant | Nitrogen-based fertilisers |
| Electricity | ✓ Yes | ✗ Indirect relevance only | Cross-border electricity imports |
| Hydrogen | ✓ Yes | ✗ Not typically relevant | Green and grey hydrogen |
⚠ Timber, concrete, glass, insulation and most other construction materials are NOT currently in scope. CBAM in its current form applies only to the six sectors above. Expansion to all EU ETS sectors is expected by 2030, which would bring more construction materials into scope over time.
The 50-tonne exemption threshold
Under the 2025 Omnibus simplification (Regulation EU 2025/2083), importers bringing less than 50 tonnes per year of CBAM-covered goods into the EU are exempt from all CBAM obligations. This threshold exempts approximately 182,000 importers — mostly SMEs — while still covering over 99% of emissions in scope.
If your annual imports of steel, cement, and aluminium combined are below 50 tonnes, CBAM does not currently apply to you. Above that threshold, you must become an authorised CBAM declarant.
Note: the 50-tonne threshold does not apply to electricity and hydrogen.
Timeline
✓
Oct 2023 – Dec 2025
Transitional phase — reporting only
Importers reported embedded emissions quarterly. No financial obligations. Learning period for all parties.
→
1 January 2026 — Now
Definitive regime — financial obligations begin
Importers above 50t threshold must be authorised declarants, purchase CBAM certificates, and submit annual declarations by 30 September.
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2027
EU ETS free allowances phase-out accelerates
Financial pressure on covered sectors increases as free allowances are gradually removed.
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2027 — UK
UK CBAM expected
The UK government is advancing its own carbon border mechanism, mirroring key elements of the EU approach.
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By 2030
Expansion to all EU ETS sectors
CBAM expected to expand to cover all sectors under the EU ETS — potentially including more construction materials.
What is embedded carbon and how is it measured?
CBAM is based on the embedded carbon in imported goods — the greenhouse gas emissions generated during their production, including both direct emissions (fuel combustion, industrial processes) and, for some sectors, indirect emissions from electricity used in manufacturing.
For CBAM compliance, embedded carbon must be calculated using one of two methods:
Actual emissions data
Verified facility-level emission data provided directly by the manufacturer or producer. Most accurate. Requires the supplier in the exporting country to measure and report their actual production emissions.
Default values
Where actual data is unavailable, the EU provides default embedded emission values by country and sector. These are conservative (typically higher than actual emissions) to incentivise use of real data.
⚠ Important limitation for FastLCA users: FastLCA uses EPiC Database 2024 (hybrid LCI, Australian supply chain data) and DESNZ 2025 factors. These are suitable for early-stage embodied carbon estimates and Scope 3 Cat 1 screening — but they are not the verified facility-level emission data that CBAM compliance requires. For CBAM declarations, you need actual production emission data from your supplier, or the EU default values from the official CBAM registry.
What CBAM means for construction procurement
Even if your company is not itself an importer, CBAM is changing the economics of construction material procurement in three ways:
1. Steel pricing will increasingly reflect carbon intensity
Electric arc furnace (EAF) steel has roughly 70–80% lower embedded carbon than blast furnace steel. Under CBAM, the carbon cost difference between these production routes is becoming a direct financial variable. Low-carbon steel from EAF producers will face lower CBAM certificate costs — creating a genuine price signal for procurement teams.
2. Supplier EPD data is becoming commercially valuable
Manufacturers who can provide verified facility-level embedded carbon data — ideally through a third-party verified EPD — will be preferred suppliers for EU importers facing CBAM obligations. Asking suppliers for EPD documentation is no longer just a sustainability best practice; it's supply chain risk management.
3. Embodied carbon is moving from voluntary to mandatory
CBAM is the first major regulation to put a direct financial price on embodied carbon in traded goods. Combined with the EU Digital Product Passport requirements and national whole-life carbon policies, the direction of travel is clear: embodied carbon will be mandatory to report and price within this decade.
Calculate embodied carbon for free
FastLCA covers steel, cement, aluminium and 36 other construction materials using EPiC Database 2024. Not a CBAM compliance tool — but useful for early-stage screening, Scope 3 Cat 1 estimates, and understanding which materials dominate your carbon exposure.
Open LCA calculator →
Scope 3 Cat 1 →
CN code checker — is your product in scope?
Enter your product's CN code (8 digits) or HS heading (4 digits) to check if it falls under CBAM. Based on Annex I of Regulation (EU) 2023/956.
⚠ This checker covers the main HS headings from Annex I of Regulation (EU) 2023/956. For definitive confirmation, always verify against the official CBAM regulation or consult a customs professional. Some CN codes within listed HS headings may be excluded.
CBAM cost estimator
Estimate your indicative CBAM certificate cost exposure for a shipment. Uses a simplified version of the official formula: tonnes × embedded emissions (tCO₂e/t) × ETS price (€/tCO₂e) × CBAM phase-in factor.
⚠ Important: This is an indicative estimate only. Actual CBAM costs depend on verified facility-level emission data (or official EU default values by country and CN code), the exact ETS quarterly average price, and the applicable phase-in factor. Consult a qualified CBAM professional for compliance purposes.
Total embedded emissions
tCO₂e
Indicative CBAM cost
EUR (2026 estimate)
Cost per tonne imported
EUR/t
Phase-in factor 2026: 97.5% · Cross-sectoral correction factor 2026: 100% · Carbon price paid abroad deducted if applicable (not included here)
Frequently asked questions
Does CBAM apply to construction companies that buy steel domestically?
No — CBAM only applies to direct importers of covered goods crossing the EU border. If you buy steel from a domestic distributor or mill within the EU, CBAM is not your direct obligation. However, your supplier may pass on CBAM-related cost increases in their pricing.
Does CBAM cover concrete or prefabricated concrete elements?
Cement is in scope, but concrete products (ready-mix, precast elements, blocks) are not currently covered under CBAM in its initial scope. The embedded carbon of concrete products used in construction is not directly subject to CBAM obligations at this stage, though expansion to downstream products is under discussion.
What is the difference between CBAM embedded carbon and EPD A1–A3 values?
They measure similar things but use different methodologies and boundaries. EPD A1–A3 (under EN 15804) covers production-stage GWP using a process-based LCI approach. CBAM embedded carbon covers direct and indirect production emissions using facility-level data or EU default values. They are related but not identical — an EPD cannot be directly used as a CBAM declaration, though the underlying carbon intensity data overlaps significantly.
How does CBAM interact with Scope 3 Category 1 reporting?
CBAM and Scope 3 Cat 1 both address upstream emissions from purchased materials — they are complementary, not the same. Scope 3 Cat 1 is corporate GHG accounting under the GHG Protocol. CBAM is a trade regulation creating financial obligations. The same underlying emission factor data can inform both, but the methodologies, boundaries, and required precision differ. See our
Scope 3 Category 1 guide for more detail.
Will CBAM expand to timber or other construction materials?
Not in the near term. CBAM is currently focused on the six carbon-intensive sectors. Expansion to all EU ETS sectors is expected by 2030, but timber is not currently in the EU ETS and is unlikely to be added to CBAM's scope in this period. However, the broader policy direction — carbon pricing on construction materials — is moving in that direction through other routes including national whole-life carbon requirements.
Where can I find official CBAM guidance?
The European Commission's official CBAM page at
taxation-customs.ec.europa.eu is the authoritative source. For compliance, consult a qualified customs or sustainability professional — CBAM obligations are complex and errors carry financial penalties.