Thailand’s steel industry is preparing for a step change in export costs when the European Union’s Carbon Border Adjustment Mechanism moves into its definitive, paid phase on January 1, 2026. During the transition period, running from October 1, 2023 to December 31, 2025, EU importers must report the “specific embodied carbon” of covered goods. From 2026, those importers must buy and surrender CBAM certificates tied to embedded emissions, with prices linked to the EU Emissions Trading System. The Federation of Thai Industries’ Steel Industry Group says the shift makes carbon an unavoidable trade cost that can reshape competition.
CBAM initially covers six goods groups: iron and steel, cement, fertilisers, aluminium, electricity, and hydrogen. For steel, covered items range from hot-rolled and cold-rolled steel and rebar to steel pipes and semi-finished products such as slabs and billets, identified through EU customs classification and European Commission guidance. Kasikorn Research Center estimates that once the paid phase begins, the initial effect could equal about 3.8% of Thailand’s exports to the EU in 2026, worth roughly 28 billion baht. It expects the largest pressure to fall on steel and aluminium, while cement and fertilisers are expected to see limited impact because Thailand exports relatively small volumes of those products to the EU.
What Changes in 2026: Certificates, MRV, and Higher Cost per Tonne
For exporters, the cost shock is not only about the CBAM certificate itself. Compliance also requires Measurement, Reporting and Verification work to collect, calculate, and verify product-level emissions data, and to coordinate with EU importers so certificates can be purchased and surrendered correctly. In its CBAM reporting, KResearch cited an indicative carbon price range of €60–90 per tonne. It also warned that Thailand’s production emissions per tonne can be far higher than Europe’s—at times up to 17 times higher—particularly where producers rely on coal-based processes. For steel and steel products, KResearch estimated CBAM compliance could raise costs by 1,300–1,500 baht per tonne, around 1.5–1.7% of product value.
KResearch also put annual CBAM-related costs for Thai steel exporters to the EU at roughly 167–193 million baht, highlighting why the Thailand steel industry CBAM impact is being watched so closely ahead of 2026. The research house identified iron and steel and aluminium as the two key Thai sectors affected at the start, citing 2024 export values to the EU of USD 95.1 million for iron and steel and USD 56.7 million for aluminium. It also noted that EU importers may factor CBAM costs into purchasing decisions, which can influence supplier choices even before full cost pass-through is clear.
Looking beyond 2026, Thai industry groups are tracking a late-2025 European Commission proposal to extend CBAM to downstream products that rely heavily on steel and aluminium, with a target start date of January 1, 2028, alongside tougher traceability and anti-circumvention measures. The EU has also rolled out Regulation (EU) 2025/2083 as a CBAM “simplification” package, including a 50-tonne-per-year mass threshold exemption for certain CBAM goods such as iron and steel, aluminium, fertilisers, and cement (with electricity and hydrogen excluded). Separately, global market commentary notes that EU steel safeguard measures are set to be replaced by a tighter regime from July 1, 2026, adding to the regulatory backdrop for exporters.
When does the EU’s CBAM move from reporting to paid compliance?
How big is the expected initial exposure for Thai exports to the EU in 2026?
Why is steel expected to be among the most exposed sectors under CBAM?
What does research estimate for the added cost on Thai steel exports under CBAM?
What is the key Thailand steel industry CBAM impact to watch after 2026?
