According to a new report from the environmental think tank Sandbag, supported by the Konrad-Adenauer Foundation, the EU’s Carbon Border Adjustment Mechanism (CBAM) in its current form would remove 246 million free allowances per year compared to 2023.

However, the impact would be significantly higher if upstream products were added to the CBAM, reaching 291 million allowances. Furthermore, the mechanism could remove up to 432 million allowances per year if refinery products and chemicals were also included — worth an estimated €35 billion at a price of €80 per allowance.

On the other hand, the report notes that for non-EU trading partners, the mechanism “in its current scope” could cost €11.3 billion in fees annually — a burden that could be reduced “to only €715 million (about 0.07% of the value of imports) if all trade partners implemented a €50 carbon price.”

CBAM, which “is an EU climate policy, rather than an international trade policy,” as the report stresses, is set to begin on 1 January 2026. Despite persistent rumors of a delay, the European Commission on Monday confirmed the date following a request from Eurometal.

“The date of entry into force of CBAM on 1 January 2026 is EU law. It can only change with a legal proposal by the European Commission and the agreement of the European Parliament and the European Council. There is no such proposal on the table,” the EU executive stated.