CBAM Is Reshaping Global Trade: What APAC Steel and Cement Producers Must Do Now

The move into its financial phase is causing a ripple effect across global value chains. For steel and cement producers outside the EU, particularly within the Asia Pacific (APAC) region, CBAM is more than a new compliance requirement. It is a structural shift in trade competitiveness and a wake‑up call for industries whose carbon footprints were never previously monetised at the border.

APAC’s industrial sector supplies some of the world’s largest volumes of steel, cement, and downstream products into Europe. From January 2026, exports are now priced by cost, quality, and carbon. Meaning that producers who cannot prove their emissions, or reduce them, will be rapidly out‑competed by those who can.

CBAM’s Far‑Reaching Impact on APAC Competitiveness

While CBAM applies to all non‑EU exporters, APAC producers face a unique impact. The region’s steel and cement industries are among the largest and most energy‑intensive in the world, contributing a significant share of global CO₂ emissions. Yet monitoring systems and emissions reporting frameworks are often inconsistent with EU requirements.

Under the regulation, EU importers must declare the embedded carbon in the products they purchase. If exporters cannot supply verified, installation‑level emissions data aligned with EU methodologies, authorities apply default emissions values¹, which the European Commission has intentionally set at punitive levels. These default values frequently exceed actual emissions by a wide margin and, when multiplied by the EU ETS carbon price, create a CBAM bill that materially inflates the cost of APAC exports.

This financial impact directly affects an exporter’s price competitiveness. EU buyers are already reevaluating supply chains based on carbon intensity. As defaults rise, benchmark allowances diminish in the next couple of years, and carbon prices fluctuate upward, the competitiveness gap between low‑carbon and unverified products continues to widen.

APAC producers who cannot demonstrate compliance risk face higher costs and potential loss of EU market access.

What actions should producers take to mitigate the risks?

1. Declaring verified installation‑level emissions is financially essential.

The most immediate action for producers is straightforward yet significant: stop relying on default values and establish systems to declare actual emissions.

To avoid costly defaults, producers need EU‑equivalent Monitoring, Reporting, and Verification (MRV) systems. This requires a shift from broad corporate‑level accounting to rigorous installation‑level data collection, including:

• Defined system boundaries for fuels, raw materials, and process emissions
• Continuous measurement and calibration records
• Mass and energy balances aligning with EU ETS rules
• Quarterly emissions submissions using EU templates
• Verification by accredited third‑party auditors

This is not merely bureaucratic. It is financially essential. For many steel and cement exporters, moving from defaults to actual emissions can cut CBAM costs by double‑digit percentages, which can be deployed for a quick win.

2. Beginning to deploy short‑ and long‑term decarbonisation strategies to enhance long-term competitiveness.

CBAM rewards both accurate reporting and lower emissions. To remain competitive, APAC producers must begin reducing scope 1 and 2 emissions through short and long‑term strategies:

• Improving energy and process efficiency
• Substituting fossil fuels with waste‑derived fuels, biomass, or electrified systems
• Increasing scrap use for steelmaking
• Reducing clinker content in cement through SCMs
• Planning transitions to hydrogen‑based DRI, electric arc furnaces, or CCUS technologies

The EU’s signal is clear: the higher the emissions, the higher the cost. Producers who reduce carbon intensity today will face significantly lower CBAM liabilities tomorrow.

Key Challenges: Awareness, Capability, and Long‑Term Vision

Despite CBAM’s urgency, many APAC producers still struggle with foundational challenges that slow progress.

• Limited Awareness of CBAM’s Requirements and Complexity

CBAM is not a simple tax, it is multi-faceted and many exporters remain unsure about what data is required, how costs are calculated, and how CBAM affects pricing during contract negotiations with EU buyers.

• Lack of Readiness for EU‑Style MRV Systems

Most APAC facilities track emissions using national or corporate frameworks that differ significantly from EU ETS rules. Common gaps include absent calibration records, unclear system boundaries, insufficient data granularity, and weak QA/QC processes. Without addressing these gaps, producers fall automatically under punitive defaults.

• Limited Understanding of Long‑Term Decarbonisation Options and their Techno-Economics Feasibilities

Technologies such as green hydrogen, CCUS, and EAF conversions are still unfamiliar to many operators. Producers struggle to evaluate:

• Technical feasibility
• Infrastructure requirements
• Cost trajectories
• Policy incentives
• Business case certainty

The result is hesitation - even though planning, permitting, and integration for these technologies require years of lead time.

What Ramboll Brings: Proven Experience and Practical Near‑Term Solutions

Ramboll’s work across steel, cement, and other hard‑to‑abate sectors in Europe and Asia has built a strong foundation of experience in both CBAM‑related compliance and industrial decarbonisation. This experience offers producers a clearer understanding of what can be done immediately, and what steps are necessary to prepare for longer‑term transitions.

A significant portion of Ramboll’s work involves helping producers establish EU‑equivalent Monitoring, Reporting and Verification (MRV) systems. This includes developing installation‑level monitoring plans, strengthening data governance practices, clarifying system boundaries, and preparing facilities for third‑party verification. These capabilities are informed by Ramboll’s direct engagement with EU ETS‑aligned MRV systems and its involvement in auditing and emissions verification activities across different industrial facilities.

Another core capability lies in CBAM cost modelling and strategic planning. By combining technical data from industrial processes with commercial modelling tools, Ramboll supports producers in assessing their exposure under CBAM, evaluating how default values compare with actual emissions, and identifying decarbonisation levers with the greatest impact. This helps facilities create phased transition plans that align operational realities with compliance needs.

Ramboll also works with clients on near‑term decarbonisation measures that improve efficiency and lower carbon intensity. These measures typically include energy system optimisation, waste heat recovery, increased scrap usage in steelmaking, adjustments to clinker ratios in cement, and the use of alternative or lower‑carbon fuels. Many of these actions draw on established engineering practices and can be deployed without significant infrastructure changes, making them practical first steps for producers navigating CBAM.

For longer‑horizon decisions, Ramboll provides technical advisory and engineering support for carbon capture, utilisation and storage (CCUS), hydrogen‑based direct reduction, electric arc furnace transitions, and process electrification. Among those, early-stage feasibility assessments help producers understand not only the technological pathways available but also the infrastructure requirements, energy implications, and potential business cases associated with deeper decarbonisation technology deployment.

Time to Act

CBAM represents a structural shift in how carbon emissions influence trade and industrial competitiveness. For APAC steel and cement producers, adapting to this shift requires both reliable emissions reporting and a credible decarbonisation strategy. Early action will help producers manage cost exposure, maintain access to the EU market, and position themselves more competitively as similar carbon measures emerge in other regions.

Ramboll’s technical, engineering, and regulatory experience across global industrial systems offers producers a set of practical capabilities to support this transition - from improving data quality and reporting systems to evaluating viable decarbonisation pathways. While each facility’s situation is different, the need to prepare is universal, and the steps taken today will shape competitiveness in the years ahead.

Ready to learn more? Click here https://c.ramboll.com/navigating-cbam-impacts-for-steel-and-cement-producers to access a webinar recording on this topic or reach out to our experts.

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_{1 Based on provisional EC benchmark and default values to be formally published upon EU official journal publication}