CBAM stainless steel impact: Short term gains, long term risks
CBAM requires EU stainless steel importers to report and pay for embedded CO 2 emissions. The absence of a fully functioning third-party verification system has forced importers to rely on high default values or significantly cut imports. Analysis shows that reporting actual emissions would significantly reduce costs of CBAM stainless steel for most Asian exporters, incentivising importers to declare CBAM actual emissions and reduce their carbon footprint. While CBAM provides short-term benefits to European mills through higher prices and reduced import competition, the long-term impact is negative as rising costs will shrink the addressable market and drive end-users outside the EU.
By CRU Group
As the definitive phase of CBAM started on 1 January 2026, importers of stainless steel into the EU must report embedded emissions and pay for those in 2027. Importers must declare CBAM actual emissions, verified by an accredited third party, or use country-specific default values defined by the European Commission. The current framework for CBAM stainless steel requires submission of direct emissions linked to production, supplemented by emissions from relevant precursors such as nickel and chrome. These requirements were anticipated, as importers have been encouraged to report emission values since the start of the CBAM Transition Period( 1 October 2023), although without independent verification or payments.
CBAM will impact most EU stainless imports Imports play a significant role in the European stainless steel market. CRU estimates that stainless imports accounted for 25 – 30 % of total market supply over the last five years. Imports of flat-rolled stainless steel( CRC, PMP, HRC) into the EU are dominated by material from Asia, including South Korea, Taiwan( China), India, Vietnam, Indonesia and China. Imports of semifinished slab into the EU are almost equally divided between the UK and Indonesia. UK slab imports into the EU are part of Marcegaglia’ s internal operations, as the company combines a UK-based melt shop with EU-based rolling assets. Most Asian rolled stainless imports into the EU are CRC, with Asian mills supplying 71 % of total EU CRC imports( 9M 2025, GTT). The existing CBAM framework encourages importers to declare actual emission values to avoid the high cost of default values. However, importers do not yet have access to fully functioning third-party verification services, forcing them to either rely on default values or minimise their exposure to imports altogether. We analysed the new set of CBAM documents published by the European Commission in December 2025. The documents contain benchmark and default values for CBAM stainless steel products from individual countries, enabling us to estimate the cost of CBAM liabilities for key exporting countries.
Figure 1
Our analysis indicates that imports from Taiwan( China) – a leading supplier of rolled stainless steel to the EU – will be most significantly affected. The import quota for CRC and strip from Taiwan( China) were filled by 6 % while the same quota was filled by 100 % in the first few days of 2024 – 25. The European Commission set default values for Taiwan( China) at levels very close to those for Indonesia – a country with very high CO 2 emissions. This allocation likely reflects the assumption that most Taiwanese( China) stainless steel is rolled from Indonesian stainless semis. These high default values will incentivise Taiwanese( China) importers to disclose actual CO 2 emissions and motivate local mills to reduce their carbon footprint.
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