CBAM and the Automotive Industry: Indirect Exposure via Steel Components

Why the Automotive Industry Is Exposed Indirectly

Most automotive companies never sign a purchase order for raw steel. They buy stampings, castings, forgings, body parts and modules from their suppliers. Yet a passenger car contains around 1 tonne of steel and roughly 200 kg of aluminium, and those embedded emissions ride in almost every component that crosses the border. That is the heart of the indirect exposure: you do not import the steel, but you import the things made from it.

To see where the charge lands, it helps to place the CBAM mechanism accurately. CBAM prices the carbon embedded in covered goods at the border, identified by their Combined Nomenclature code. Today the covered goods are the direct precursors: steel under CN chapters 72 and 73, aluminium under chapter 76. A buyer who imports coil, sheet, tube or extruded profile is already directly liable in 2026. A buyer who imports a finished bracket made from that steel, for now, is not.

What Counts Today, and What Is Added From 2028

In the definitive period, the scope is the precursor materials. The downstream extension, expected from 2028, widens the net to around 200 steel- and aluminium-intensive finished products, identified by CN code. For the automotive sector that means specific parts, wheels, certain gearbox and engine components, structural assemblies, move into scope, while the finished passenger car itself stays outside.

The practical consequence is that the same physical steel can be in or out of scope depending on how far down the value chain it is imported. A part that is exempt in 2026 may be covered in 2028 without any change to its material content.

The Supply-Chain Data Problem

The exposure is real, but the data to quantify it sits several tiers away. The emissions embedded in a stamped bracket depend on how the steel coil was made, which mill produced it, and what verified figure sits behind each part number. Tracing that back through the tiers, knowing which route, which verified figure sits behind each part number, is the real automotive CBAM project. It is a multi-tier sourcing-data exercise, not a year-end form.

The Cost Lever Runs Through the Component Chain

Because only the embedded steel is charged, the cost of a part under CBAM is driven by how that steel was made and, above all, by whether its real emissions are documented. The same tonne of steel can carry very different charges.

This is quantifiable, and anyone can calculate the CBAM cost of their own steel with the kolum calculator; the figures below come from exactly that tool. The formula is (embedded emissions − benchmark) × quantity × certificate price. For 2026, 97.5% of the benchmark amount is free and the certificate price is €75.36 per tonne of CO₂ (official Q1 2026 reference). The example below takes hot-rolled coil (CN 72083900) from China, per tonne, for 2026:

Read against the roughly 1 tonne of steel in a passenger car, that is on the order of €164 of CBAM cost on the embedded steel per vehicle’s worth at blast-furnace default values in 2026, falling to about €25 with a clean plant’s verified data. This per-vehicle figure is illustrative, since real cars use a mix of grades and the steel arrives as many parts rather than one coil, but it sizes the lever: the route sets the benchmark, and the supplier’s verified data decides whether you pay the high default or the low real figure.

What Automotive Procurement Should Do Now

The direction is clear enough to act before the downstream rules are final. The first move is to map exposure across the bill of materials: which parts are steel- or aluminium-intensive, which are imported, and which of those would fall under the 2028 list. That map turns an abstract regulation into a ranked list of part numbers.

The second move is the data chain. For the highest-exposure parts, start now to trace the steel back to the producing mill and to secure verified actual emissions data, because that is the difference between the default value and a figure up to 90% lower. Suppliers that cannot yet deliver verified data are a sourcing risk to flag, not a problem to discover in 2028.

The third move is to price the trajectory into contracts and supplier negotiations: the rising chargeable share through 2034, and the 2028 shift from raw material to component. A long-term supply agreement signed today should already carry the curve.