CBAM Weekly News Update – Week of 26 February – 3 March 2026

This week's CBAM developments were dominated by the mechanism's entry into its definitive payment phase, mounting deindustrialisation concerns in steel and aluminium, Italy's challenge to the EU ETS, the Commission's fertiliser decision, downstream expansion risks, and Taiwan's SME compliance support initiative.

1. CBAM Enters Definitive Payment Phase

The EU's Carbon Border Adjustment Mechanism officially entered its definitive phase on 1 January 2026 following more than two years of transitional reporting obligations.¹ Importers must now purchase certificates covering embedded carbon in iron and steel, aluminium, cement, fertilisers, electricity and hydrogen produced outside the EU ETS.^{2, 3} S&P Global notes that financial liabilities are now accruing, with first significant settlements expected later in 2026.¹

2. Industry Leaders Warn of Deindustrialisation Risk

At the EUROMETAL Southern Europe Meeting 2026 in Milan, industry leaders warned that CBAM could structurally impact downstream steel distribution.⁴ Concerns focus on competitiveness gaps and the risk that cost absorption is incomplete across supply chains.^{5, 6, 7}

3. Italy Calls for Suspension of the EU ETS

Italy's Minister for Enterprises called for suspension and radical revision of the EU Emissions Trading System, linking it to industrial competitiveness pressures.^{8, 9, 10} Debate among Member States highlights mounting political pressure on carbon pricing ahead of the scheduled free allowance phase-out.

4. Commission Rejects Fertiliser Suspension

The European Commission confirmed fertilisers remain within CBAM scope despite lobbying from hydrogen and ammonia stakeholders.^{11, 12, 13} Temporary MFN tariff relief on ammonia and urea was proposed as a mitigating measure.¹¹

5. Downstream Expansion Risks (2028)

The planned expansion of CBAM to 180 additional downstream steel and aluminium product categories is expected in 2028.^{14, 15} Analysts warn that interim cost asymmetries may structurally shift trade flows before loopholes are closed.⁵

6. Taiwan Launches SME Compliance Platform

Taiwan's Ministry of Environment announced a dedicated SME platform to assist exporters in meeting CBAM obligations.^{16, 17, 18} Taiwan exported 3.74 million tonnes of covered goods during the transitional period, ranking 13th among CBAM trade partners.¹⁶

In collaboration with

Hulsman & Partners

This article was produced in collaboration with Hulsman & Partners. Looking for expert guidance on CBAM compliance? Their team offers specialised consultancy to help your organisation navigate the Carbon Border Adjustment Mechanism.

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