As May draws to a close, the first round of global compliance stress tests following the official launch of the EU Carbon Border Adjustment Mechanism (CBAM) has kicked off. With the carbon price benchmark standing at 75.36 euros per tonne and coverage set to expand to 180 downstream products, performance varies drastically across nations. Some enterprises have secured certifications ahead of schedule, while others lack basic emission data, and a handful have obtained valid carbon passports. Based on the latest updates, this article presents a full overview of compliance status among major exporting economies and explores how Chinese enterprises achieve breakthroughs through direct renewable power connection.
More than an environmental regulation, CBAM serves as a new access ticket for international trade. Indonesia’s steel manufacturer PT Tata Metal Lestari has obtained preliminary CBAM verification, with coated steel recording carbon emissions of 2.2 tonnes of CO₂ per tonne. The company maintains normal exports to European markets, taking the lead among ASEAN peers. Vietnam faces grave challenges: its annual CBAM-covered exports to the EU hit around 3.4 million tonnes, yet poor carbon data transparency leaves most local firms unable to furnish verified emission figures, putting export orders at stake. Despite ongoing conflicts, Ukraine strives to cut carbon intensity via waste recycling. Severe damage to energy facilities renders CBAM compliance nearly unachievable, prompting calls from the European Parliament for special exemption policies. The UK is caught in intense policy disputes, as its domestic carbon pricing system remains unaligned with the EU regime. Failure of mutual recognition will impose extra carbon costs on steel, aluminium and other exports, creating fresh trade barriers post-Brexit. Only a small number of global enterprises have completed full-process compliance covering data calculation and third-party verification. Indonesia’s early certification sends a clear warning: CBAM compliance hinges solely on credible data and allows no delays.
CBAM also triggers profound shocks within the EU. Fertilizer imports surged by 156% by late 2025 as businesses sought to evade carbon tariffs. The European Commission rolled out a dedicated fertilizer action plan but refused exemptions for the sector. Agricultural associations warn of rising farming costs and subsequent hikes in food prices. The steel industry undergoes rapid restructuring. Combined with new steel safeguard measures, CBAM drives European downstream buyers to opt for local suppliers, accelerating tangible supply chain localization.
Chinese enterprises take proactive measures rather than passive response. Two pivotal policies issued recently deliver strong strategic signals. The National Development and Reform Commission and the Ministry of Ecology and Environment jointly released a circular regulating service fees for national carbon market transactions. The refined management rules encourage enterprises to strengthen carbon asset management, laying groundwork for future carbon price alignment and CBAM credit offsetting.
A landmark policy issued on May 20 by national authorities upgrades direct renewable power connection from one-to-one exclusive private lines to multi-user shared connections at industrial park and regional levels. The EU adopts stringent green power certification standards, rejecting renewable energy certificates and Chinese certified emission reductions. It only recognizes verifiable physical power transmission paths with hourly power matching records. The new shared connection model slashes individual construction costs, enabling small and medium-sized exporters to obtain EU-approved green power carbon credentials. Power-related carbon footprints of manufactured goods can be fully offset, cutting carbon tariffs by roughly 340 euros per tonne of aluminium. At China-EU carbon neutrality cooperation forums, enterprises propose shared carbon data verification mechanisms and prioritize green compliance to sharpen supply chain competitiveness. Direct renewable power access has emerged as the most practical solution for Chinese firms tackling CBAM challenges.
The compliance timeline grows increasingly tight. The CBAM certificate price stood at 75.36 euros per tonne of CO₂ in Q1 2026, translating to an additional cost of around 340 euros per tonne of aluminium. Starting from 2028, coverage will expand from six basic raw materials to roughly 180 downstream products including machinery, auto parts and home appliances, potentially affecting over half of China’s industrial exports to the EU. All free carbon allowances within the EU will be phased out by 2034, pushing extra costs for blast furnace steel to 140-160 euros per tonne, over 40 times the current level. Enterprises have less than two years to establish robust carbon data systems, and non-compliant businesses will be eliminated from the market by 2028.