EU Carbon Tariff to Take Effect in 2026, Impacting China's Fastener Trade

The EU Carbon Border Adjustment Mechanism (CBAM), commonly known as the “carbon tariff,” will officially take effect on January 1, 2026. The UK currently plans to implement a similar policy in 2027, while countries including Canada, Australia, and Japan are also advancing related measures. Chinese exporters will face multiple carbon compliance requirements in the future.

The current carbon tariff primarily targets steel, aluminum, and related products—both core raw materials for fasteners (e.g., steel bolts, aluminum new energy fasteners). These account for approximately 4% of China's exports to Europe, with manageable short-term direct impacts. However, the EU has explicitly stated it will expand the policy scope to include chemicals and plastics (some fastener raw materials) in the future. Long-term compliance complexity will increase, and the policy impact will propagate along the supply chain to Chinese fastener manufacturers and upstream raw material suppliers.

Among Chinese fastener trade enterprises, leading steel and aluminum suppliers have proactively deployed carbon reduction technologies and monitored policy developments, enabling them to provide compliant carbon emission data. However, most small and medium-sized fastener manufacturers lack carbon management capabilities. Even if they do not directly export to Europe, their products entering the European market through downstream channels will still require compliance with carbon emission data requirements, potentially disrupting supply chain stability.

The EU procurement side has now introduced a “carbon threshold”: bids must include carbon tariff mitigation plans, and procurement contracts will explicitly stipulate terms for carbon emissions data provision, third-party verification, and related cost allocation. This will become a critical consideration factor for fastener trade with China.

(Source: China Economic Times)