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EU Carbon Border Tariff Takes Effect as Fraud Fears and Cost Pressures Surface

Industry groups warn of enforcement gaps, with rising costs for regions dependent on imported materials.

Overview

  • The EU’s Carbon Border Adjustment Mechanism begins applying on January 1 to imports of steel, aluminium, cement, fertilisers, electricity and hydrogen.
  • French overseas territory Martinique expects an 11% rise in cement prices, with clinker imports facing new charges that suppliers say will add about €30 per tonne.
  • Construction leaders in Martinique project a 3% to 5% increase in overall building costs and request exemptions due to a lack of viable EU supply alternatives.
  • Industry experts caution that emissions claims may be manipulated, citing incentives to misdeclare aluminium as recycled and doubts over low-carbon declarations from coal-powered Chinese smelters.
  • Economists warn of competitiveness losses and carbon leakage, while the European Commission forecasts roughly €1.4 billion in annual revenues from 2026 with higher proceeds expected by 2030.