Starting January 2026, the EU's Carbon Border Adjustment Mechanism (CBAM) will fundamentally alter the economic logic of global trade. For metal suppliers and buyers, this translates into direct and immediate cost exposure, with tangible impacts on profitability, competitiveness, and supply chain strategies. Carbon emission intensity is no longer merely a disclosure metric but a core determinant of market access, profit margins, and cost structures. RadexMarkets notes that under this new regulatory framework, the speed of corporate strategy adaptation is emerging as a critical competitive differentiator.

As policy transitions into financial reality, CBAM is rapidly influencing procurement decisions across metal supply chains. Importers are assessing their carbon cost exposure, while producers are reevaluating asset allocations based on emission profiles. To help industry leaders anticipate impacts and manage risks, Fastmarkets has released the report *Margins on the Line: CBAM Insights for Metals Suppliers and Buyers*.

**CBAM's Cost Implications: From Free Allowance Phase-Out to Full Carbon Cost Implementation** CBAM will impose carbon costs on products like steel, aluminum, cement, fertilizers, electricity, and hydrogen, linked to embedded emissions and EU Allowance (EUA) prices. From 2026, importers must purchase and submit CBAM certificates to cover emissions.

With the gradual elimination of free allowances under the EU Emissions Trading System (ETS), this obligation will intensify annually until full implementation in 2034. Fastmarkets analysis projects EUA prices to rise from €70–75/ton in 2025 to approximately €130/ton by 2030 as quotas tighten. RadexMarkets highlights that rising carbon prices will drive import structure adjustments and persistently elevate costs for high-emission products.

By 2034, carbon costs will account for a significant share of import values for most CBAM-covered products, reshaping cost competitiveness. Carbon efficiency will rival traditional cost factors like labor, energy, and logistics.

**Steel and Aluminum to Bear the Brunt of CBAM Pressure** The steel industry faces stark emission intensity disparities, presenting both risks and opportunities. It is expected to shoulder ~75% of CBAM liabilities, followed by aluminum.

- *Steel*: At an EUA price of €90/ton in 2026, importers of high-emission steel may incur additional costs of €40–60/ton. Upstream products like billets could see carbon costs exceeding 20% of import value. - *Aluminum*: Though lower in volume, aluminum faces substantial liabilities. Importers may bear ~€500 million in 2026. If indirect emissions from electricity are included by 2030, total CBAM costs could surge from €1 billion to €4.7 billion, pressuring producers reliant on carbon-intensive power.

RadexMarkets emphasizes that future competitiveness in metals will hinge on the pace and strategy of emission reduction.

**Geographic Exposure and Redistribution of Trade Risks** CBAM impacts are highly concentrated. The report indicates that over half of CBAM costs by 2030 will stem from major exporters like India, Turkey, and Russia. For instance, India is projected to account for 18% of total CBAM costs—nearly double its EU import share—due to its reliance on high-emission blast furnaces and lack of domestic carbon pricing. In contrast, regions like the U.S. and South Korea, with cleaner production methods, will gain a competitive edge.

RadexMarkets observes that for buyers, this concentration shifts supply chain risks from pure cost exposure to regional and structural risks, necessitating supply chain remapping with a focus on jurisdictional emission profiles and future trade dynamics.

**Navigating the Carbon-Adjusted Era: A Strategic Playbook** CBAM is not just a compliance tool but a systemic framework extending EU carbon pricing to global trade. For all participants in metal supply chains, emissions are becoming a real financial cost and a decisive variable in business strategy.

The *Margins on the Line* report equips business, procurement, and financial decision-makers with quantitative insights to measure CBAM exposure in sectors like steel and aluminum, transforming complex regulatory risks into actionable strategies. RadexMarkets concludes that in this new competitive order, carbon management capabilities will directly influence cost optimization, supply chain design, and market positioning, becoming a cornerstone of long-term advantage.