EU Carbon Tax Hits US Steel: Tell USTR How to Fight Back
Published Date: 10/8/2026
Notice
Summary
The EU started charging importers for the carbon pollution in certain products like steel and aluminum on January 1, 2026. This affects U.S. producers, workers, and exporters who sell to the EU, especially in industries like cement and fertilizer. The U.S. government wants your thoughts by November 9, 2026, to help decide how to respond as the EU plans to add more products to this carbon tax system.
Analyzed Economic Effects
4 provisions identified: 0 benefits, 4 costs, 0 mixed.
EU requires emissions data and certificates
If you export covered products (aluminum, cement, electricity, fertilizer, hydrogen, iron and steel) to the EU, EU importers must declare the goods' embedded emissions and purchase CBAM certificates priced on EU Emissions Trading System auction prices. CBAM entered full operation on January 1, 2026, and products imported on or after that date are accruing financial obligations even though importers are not required to start paying until September 2027.
Default emissions values with punitive mark-up
If company-level emissions data from a foreign producer is not available, EU importers must use EU-provided default emissions values that include a punitive mark-up intended to encourage company data. Any company-level data must be verified by an EU-accredited third-party verifier.
Large proposed expansion to downstream products
The EU has proposed expanding CBAM to many downstream steel- and aluminum-intensive products: the Commission proposed an extension, the Council's position would add over 300 products, and the European Parliament's position would add approximately 400 products. These proposals are subject to trilogue negotiations and possible formal approval later in 2026.
Recordkeeping requirements for covered imports
EU importers must maintain accurate records for covered products imported on or after January 1, 2026, showing embedded emissions per ton, carbon price already paid in the country of production, and supplier information.
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