CARBON · CBAM
See what the EU’s carbon border tax could cost your exports — before it hits your margins.
The EU’s CBAM definitive period began in January 2026. If you export steel, aluminium, cement, fertilisers or hydrogen to Europe, your carbon is now being priced at the border. Estimate your likely exposure in a few minutes — and see how fast it climbs to 2034.
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CBAM in plain terms
Does CBAM apply to my business?
CBAM applies to EU importers of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. As a South African exporter you are not the filer — your EU customer is. But they cannot calculate their liability without emissions data from your installation, so the cost and the paperwork land on you through the contract.
The estimator above gives you an order-of-magnitude figure for that exposure. What follows is the detail behind it.
Where CBAM actually stands right now
The definitive regime is in force and 2026 liability is accruing today — but no one has bought or surrendered a certificate yet. That is the single most misstated fact in CBAM commentary.
| Milestone | Date |
|---|---|
| Transitional reporting period ended | 31 December 2025 |
| Definitive regime applies | 1 January 2026 |
| Deadline to apply for authorised declarant status | 31 March 2026 |
| First certificate price published (Q1 2026) | 7 April 2026 — €75.36/tCO₂ |
| CBAM certificate sales open | 1 February 2027 |
| First annual CBAM declaration, for 2026 imports | 30 September 2027 |
| First certificate surrender | 30 September 2027 |
Which of my shipments are caught?
Six sectors are in scope: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Since 1 January 2026 an EU importer is exempt entirely if its CBAM goods total 50 tonnes or less across the whole calendar year — a threshold that removes roughly 90% of importers while still capturing about 99% of embedded emissions.
- The 50-tonne threshold is cumulative per importer per year, across steel, aluminium, fertiliser and cement combined — not per shipment and not per product line.
- It does not apply to electricity or hydrogen. Those have no de minimis.
- Once an importer crosses it, all of that year’s embedded emissions become liable, not just the excess.
- It exempts the importer, not you. Your exposure depends on your customer’s total annual CBAM imports from every origin, not on the size of your consignment.
What does it cost to send no data?
Your EU customer can fall back on default emission values instead of your actual figures — but those defaults are drawn from the ten highest-emitting exporting countries and then marked up. The mark-up rises every year, which is the commercial argument for getting your installation data in order now.
| Import year | Mark-up on default values | Fertilisers |
|---|---|---|
| 2026 | +10% | +1% |
| 2027 | +20% | +1% |
| 2028 onwards | +30% | +1% |
Running alongside this, free allocation under the EU ETS phases out on a fixed schedule — the CBAM factor moves from 2.5% in 2026 to 100% by 2034. A cost that looks trivial this year is designed not to stay that way.
What does an EU customer need from me?
- Installation-level embedded emissions for the goods you ship, calculated to the EU methodology rather than to your own carbon tax return.
- Direct emissions in every case. Indirect (electricity) emissions for cement and fertilisers — currently excluded for iron, steel and aluminium, which given Eskom’s coal-heavy grid is the difference between a manageable and a severe exposure for South African metals. The Commission has flagged indirect emissions as a candidate for future inclusion.
- Verification by an EU-accredited verifier, required only where actual values are used. Accreditation of verifiers began in April 2026 and the first verifications are starting now, with an on-site inspection mandatory in the first year.
- Evidence of any carbon price already paid in South Africa, if you intend to claim the deduction.
Non-EU operators can register their installation and emissions data in the CBAM Registry so that several EU customers draw on the same verified figures. If you supply more than one European buyer, that is the efficient route.
Does South Africa’s carbon tax reduce the CBAM bill?
In principle yes — Article 9 allows a deduction for a carbon price effectively paid in the country of origin. In practice the deduction will be far smaller than the R308 per tonne headline rate suggests, because the draft rules require rebates, exemptions and free allowances to be netted off. South Africa’s effective carbon price, after allowances, is estimated in the low single digits per tonne.
The implementing act setting out how this works was still in draft as at September 2026, with a member state vote expected and retroactive application to 1 January 2026 anticipated but not confirmed. Anyone telling you the South African carbon tax largely cancels your CBAM liability is not reading the draft.
Common questions
Questions about CBAM
Do I have to register with the EU as a South African exporter?
No. The legal obligation sits with the authorised CBAM declarant — your EU importer or its indirect customs representative. You have no EU filing obligation, no registry obligation and no certificate purchase obligation.
You may, however, choose to register your installation in the CBAM Registry so that your emissions data is available to every EU customer you supply. Where you have several European buyers, that saves repeating the exercise for each one.
My EU customer says CBAM starts in 2027. Who is right?
Both of you, in a sense. The definitive regime has applied since 1 January 2026 and liability for 2026 imports is accruing now. But certificate sales only open on 1 February 2027, and the first declaration and surrender fall on 30 September 2027 for those 2026 imports.
The practical consequence is that the data you supply for shipments this year determines a bill your customer pays next year. Getting it wrong now is expensive later.
How much is South Africa actually exposed?
CBAM-covered exports to the EU were around €1.1 billion in 2023, roughly 5% of South Africa’s total exports. Iron and steel and aluminium carry almost all of it — cement and fertiliser together are under 0.1% of exports to the EU.
Concentration matters more than the headline. Around 60% of South African steel goes to Europe, and roughly a third of unwrought aluminium exports. For the firms in those sectors this is not a marginal issue.
What happens if my customer just uses default values?
They can, and it is legal. But default values are built from the ten exporting countries with the highest emission intensities, then marked up — 10% in 2026, 20% in 2027 and 30% from 2028. For most South African producers the default plus mark-up is materially worse than their real figure.
That gap is your negotiating position. Supplying verified actuals is the only way to be measured on your own performance rather than on a worst-case proxy.
Are downstream products like machinery and vehicle parts included?
Not yet. The European Commission proposed on 5 February 2026 to extend CBAM to roughly 180 further CN codes of steel- and aluminium-intensive downstream goods from 1 January 2028 — nails, machinery, vehicle components, appliances, metal furniture.
That proposal is still in the legislative process and the final text may change. Treat it as a planning assumption, not as current law.
What is the penalty for getting it wrong?
The penalty for failing to surrender enough certificates is set at €100 per tonne of CO₂ equivalent shortfall, indexed to European inflation, and paying it does not remove the obligation to surrender the missing certificates. Importing without authorisation carries separate penalties set by each member state.
The penalty falls on your EU customer, not on you. It will reach you through the contract.