Sandbag: CBAM will have limited impact on US exports to the EU

According to the Belgian think tank Sandbag, the EU Carbon Boundary Adjustment Mechanism (CBAM) will have only a modest impact on US exports. By 2034, when the CBAM is fully implemented, American exporters will face annual fees of €351 million, which is only 0.14 percent of the €242 billion of U.

S. exports to the EU in 2023.

After taking into account the effects of price shifting, the net burden is reduced to 160 million euros, or 0.07% of total exports, which underlines that CBAM will be far from a decisive factor for overall trade between the US and the EU.

Industry breakdown

The report shows that CBAM costs are concentrated in several industries:

• Ferrous metallurgy: about € 215 million per year
• Fertilizers: about € 130 million
• Aluminum: small net benefit of €3 million due to higher scrap content and lower emission intensity
• Cement: minor impact

These figures contrast sharply with the costs that EU producers themselves pay under the Emissions Trading System (ETS), which amount to €26-30/ton for sheet steel and €36/ton for aluminum. For comparison, American exporters receive €19-20/t for steel and €62-105/t for aluminum, which highlights the competitive advantage for low-carbon production routes in the United States.

Policy scenarios under consideration

Sandbag has modeled three possible US responses to CBAM:

• Business as usual: exporters pay all CBAM costs depending on the intensity of emissions.