If you import steel, aluminium, or fertilizer from China into the EU, CBAM — the Carbon Border Adjustment Mechanism — is no longer a distant, abstract policy. As of 2026 it is quietly changing the real cost of every shipment you bring in. And the biggest headache tends to come from a link in the chain you may not yet be focused on: whether your Chinese supplier can actually give you reliable carbon emissions data.
This guide skips the legal-text recitation you can find on any law firm’s site. It covers three things that actually affect you: when CBAM really starts costing you money, what the situation looks like on the Chinese supplier side, and what you should be doing now to manage the risk.
First, the timeline: you’re not as late as the panic suggests — but don’t relax either
There are two opposite distortions floating around about CBAM. One treats January 2026 as a cliff and manufactures alarm. The other assumes “payment isn’t due until 2027, so I can ignore it for now.” Both are wrong.
The reality: CBAM’s definitive phase began January 1, 2026, but you don’t actually start buying CBAM certificates until February 1, 2027, and your first annual declaration and certificate surrender is due September 30, 2027 — covering all of your 2026 imports.
The key implication: the bill comes in 2027, but every shipment you bring in during 2026 is already accumulating both a carbon cost and a data obligation right now. Trying to reconstruct a full year of supplier emissions data in 2027, after the bill lands, is close to impossible. So “now” is exactly when to build your data process — not because a deadline has hit, but because you’re accumulating data for a settlement a year out.
The real pain point isn’t on your end — it’s at your Chinese supplier
Most CBAM guides teach you how to file declarations and buy certificates — things within your own control. But in practice, the part that trips importers up most is getting reliable emissions data from suppliers, and that is precisely what determines your cost.
Here’s a reality about the Chinese supply base that’s worth understanding plainly: many Chinese steel, aluminium, and fertilizer producers do not yet have mature, third-party-verifiable carbon accounting systems in place. From their perspective, CBAM is the EU buyer’s problem — the legal obligation doesn’t sit with them — so willingness and ability to cooperate vary widely. Larger producers and export-savvy suppliers may already be preparing; a great many small and mid-sized suppliers either haven’t registered the issue or lack the capacity to produce this data at all.
What this means for you is direct: if your supplier can’t provide real emissions data, EU rules require the use of default values — and those defaults are deliberately set at the highest emission intensity among countries with reliable data. In other words, a supplier’s missing data converts straight into a higher carbon cost on your bill. The gap in their records becomes a number in your budget.
A detail that catches people out: which emissions actually count depends on your product
One point worth getting precisely right, because a lot of casual commentary gets it wrong: CBAM does not treat all in-scope products the same way when it comes to indirect emissions — the carbon from the electricity used in production, as opposed to the direct emissions from the production process itself. The distinction matters because China’s grid is more coal-heavy than the EU average, so indirect emissions are exactly where Chinese-made goods can look worst on paper.
Here’s how it currently breaks down:
- Fertilizers — direct AND indirect emissions both count. If you import fertilizer, the electricity-related (indirect) emissions of your Chinese supplier’s production are in scope. Given China’s grid mix, this is a genuine cost factor, not a footnote — and it’s another reason supplier-specific data matters, since a supplier drawing on cleaner power can document a real advantage.
- Steel, iron, and aluminium — currently DIRECT emissions only; indirect emissions are excluded for now. This surprises people, because aluminium smelting is enormously electricity-intensive, and electricity is the bulk of aluminium’s true carbon footprint. As of 2026, EU officials have confirmed that indirect emissions will stay out of scope for metals for the foreseeable future. So for steel and aluminium, the electricity question — for the moment — does not flow into your CBAM cost.
Two cautions on that second point. First, aluminium’s exclusion is one of the most contested issues in CBAM precisely because the electricity footprint is so large; it is plausible this changes in future revisions, so it’s worth tracking rather than treating as settled. Second, “indirect emissions excluded” does not mean aluminium is lightly treated — its direct-process emissions are still fully in scope, and the default values for metals without verified data are still punishing. The takeaway isn’t “aluminium is fine,” it’s “for aluminium, the cost driver is direct emissions and default values, not the grid — at least for now.”
How to manage the risk now
No need to panic, but this calls for being proactive rather than waiting until 2027. Four things:
- Confirm whether your imported category is in scope. CBAM currently covers iron and steel, aluminium, cement, fertilizers, hydrogen, and electricity. If you’re importing these, you’re in scope.
- Start requesting emissions data from suppliers now, and assess their ability to deliver. Don’t wait. Finding out early which suppliers can provide it and which can’t is itself valuable sourcing intelligence — it should feed into your future supplier decisions.
- Fold “carbon data capability” into your supplier evaluation criteria. CBAM effectively turns low-emission, data-transparent suppliers into more valuable suppliers. A Chinese factory that can hand you verified emissions data may be cheaper on your true landed cost than one with a lower headline quote but no usable data.
- Find out the actual state of readiness on the Chinese side — don’t assume. Don’t assume all Chinese suppliers are ready, and don’t assume none of them are. The variance is large; verify supplier by supplier.
The bottom line
The CBAM bill doesn’t arrive until 2027 — but what determines the size of that bill is the supplier data you need to start collecting in 2026. And the biggest uncertainty in that equation comes from the uneven state of readiness on the Chinese supplier side. The sooner you get a clear picture of where your Chinese supply chain actually stands on carbon data, the more control you have over your costs — and the less exposed you’ll be when the 2027 settlement comes due.
Sources: European Commission CBAM pages (taxation-customs.ec.europa.eu); Regulation (EU) 2023/956 and amending Regulation (EU) 2025/2083; timelines as reported through mid-2026 and subject to ongoing EU implementing acts. Default-value and deadline details reflect rules current as of this writing; verify against the latest Commission guidance before acting. This article is general information, not legal or compliance advice.