EU CBAM to shake Thai exports as definitive phase starts on Jan 1

EU CBAM enters its definitive phase on January 1, 2026. KResearch warns of a 28bn-baht export hit, with steel most exposed and SMEs lagging on carbon data

Thailand’s exports to Europe face fresh pressure from the European Union’s Carbon Border Adjustment Mechanism (CBAM), which enters its definitive phase on January 1, 2026. 

The EU has also rolled out Regulation (EU) 2025/2083, described as a CBAM “simplification” package, aimed at reducing complexity and easing the burden on small importers ahead of full implementation. 

What CBAM will require

Under CBAM, importers in the EU will have to account for the embedded greenhouse gas emissions of goods imported in six main categories: iron and steel, aluminium, cement, fertilisers, electricity and hydrogen. Importers will be required to cover those emissions through CBAM certificates, aligning the cost of imported carbon-intensive goods with the EU’s climate policies.

The EU is also expected to widen the scope over time to additional product groups such as plastics and polymers, glass, ceramics, paper and basic chemicals.

Key simplifications in the new EU rules

A central change is an exemption designed for small import volumes. The EU has introduced a 50-tonne-per-year mass threshold for certain CBAM goods (including iron and steel, aluminium, fertilisers and cement). Importers below that threshold are exempt, but electricity and hydrogen are not covered by the exemption. 

Other changes tighten and clarify compliance, including:

• Clearer carbon calculation rules, with independent verification required when using actual emissions data, while default values may apply where real data is not provided.
• Default values referenced to higher-emitting benchmarks (including an approach based on the average of the ten exporting countries with the highest emission intensities for certain calculations). 
• Easier crediting for carbon prices paid outside the EU, with options to use EU-set reference values rather than proving every document in full.
• Tighter requirements for indirect customs representatives, including needing authorised CBAM declarant status and facing penalties for breaches. 
• Expanded definitions of evasion, targeting practices such as splitting shipments into smaller lots or using misleading paperwork.

KResearch: 28 billion baht at risk; steel most exposed

Kasikorn Research Center estimates CBAM could affect 3.8% of Thailand’s exports to the EU in 2026, worth about 28 billion baht, as the policy moves beyond the transition period and begins aligning with the EU Emissions Trading System (EU ETS).

The research house said iron and steel and aluminium are expected to be the first sectors to feel the impact, because EU importers will factor CBAM costs into purchasing decisions.

It cited 2024 export values to the EU of:

• Iron and steel: US$95.1 million
• Aluminium: US$56.7 million
• Cement and fertilisers: comparatively small values\

Research noted that CBAM certificate costs are linked to embedded emissions, with an indicative carbon price range cited in the report of 60–90 euros per tonne.

EU CBAM to shake Thai exports as definitive phase starts on Jan 1

Why Thai steel is seen as the most vulnerable

KResearch said 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, it estimated CBAM compliance could raise costs by 1,300–1,500 baht per tonne (around 1.5–1.7% of product value), putting annual CBAM-related costs at roughly 167–193 million baht for Thai steel exporters to the EU.

Source: Nation Thailand