From January 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM) has started to reshape the economics of imported materials. The goal is clear and widely supported: reduce the carbon footprint of products entering the EU and ensure fair competition between EU producers and international manufacturers.
For industries relying heavily on materials such as steel, aluminum, and cement, however, the transition may not be smooth.
CBAM introduces a complex system for reporting and pricing the embedded emissions of imported goods. In practice, this means that companies importing steel-containing products into the EU must collect detailed emissions data from their suppliers, have it verified by accredited bodies, and purchase certificates linked to the EU Emissions Trading System.
The intention is sound. The implementation, at least in the early phase, raises several practical challenges.
First, the reporting requirements are highly complex. For many companies, especially smaller importers, understanding and managing the system requires significant administrative resources. This alone may reduce the number of suppliers willing or able to serve the EU market.
Second, CBAM relies on emissions data that manufacturers outside the EU may not have, may not wish to disclose, or may find costly to provide. If such data is unavailable, default emission values set by the European Commission can be used, but these are often so high that imports may become economically unviable.
Third, the pricing mechanism itself introduces uncertainty. Because CBAM certificates are linked to the EU emissions trading system, companies importing materials in 2026 may not know the final cost of those imports until 2027. Few businesses are comfortable taking on this level of financial uncertainty.
Finally, the system requires emissions verification by EU-accredited auditors. In mid-2026, a fully accredited verifier pool is not available yet, and the first accredited verifiers are expected only around September this year.
For the construction industry, these factors could lead to higher material costs and supply chain disruptions, particularly in steel.
None of these changes the fundamental objective. Reducing the carbon footprint of construction materials is essential for achieving Europe’s climate goals. But as CBAM moves from policy to practice, the industry must prepare for a period of adjustment.
For builders, designers, and project developers, the message is simple: understand the implications early, anticipate potential price increases, and plan supply chains accordingly.
The transition toward lower-carbon construction is necessary. The path there, however, may be more complex than expected.
This month’s Key Insight: CBAM is a reminder that carbon now has a price tag attached to the supply chain itself — not just the building. The companies that map their material origins and emissions data early will be the ones least disrupted when the costs land.
The EU's Packaging and Packaging Waste Regulation is here
Packaging may seem like a side issue in construction — but it isn't. The EU's Packaging and Packaging Waste Regulation (PPWR), in force since February 2025 and applicable from August 2026, sets new requirements for how packaging is designed, reported, and recycled across the EU market. Companies placing packaging on the market now carry greater responsibility for the waste it creates.
For Peikko, the direction is clear: even more accurate, structured data on the packaging we use is needed, and close collaboration with our suppliers is required to meet the new standards. By 2030, all packaging in the EU must be recyclable, and the groundwork for that is in progress.
Curious how packaging regulation connects to the bigger picture of circular construction? Get in touch with our sustainability team.
Learn more about the regulation at Packaging waste - Environment - European Commission
Photo credit: Microsoft stock images
What’s coming up next? In our next issue, we take a closer look at DELTABEAM® Green Reuse — Peikko's approach to giving structural steel a second life. As demand grows for circular construction, we look at how reused DELTABEAM® Green Reuse composite beams can cut embodied carbon without compromising structural performance. Can a beam from one building become the backbone of the next?
Building with Less is Peikko's monthly look at smarter structural solutions for a sustainable built environment.
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