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CBAM and Steel: How South African Steel Exporters Are Affected

Steel is one of the six sectors covered by CBAM from January 2026. South African steel exporters face direct financial obligations. This guide explains the requirements, calculations, and compliance pathway.

CBAM and Steel: How South African Steel Exporters Are Affected

Steel is one of the six sectors covered by CBAM from January 1, 2026. For South African steel exporters, this represents a direct and immediate financial obligation that must be factored into export pricing, contract negotiations, and long-term business planning.

South Africa's Steel Export Profile

South Africa's steel industry is anchored by two major integrated steel producers:

  • ▸ArcelorMittal South Africa — Vanderbijlpark (flat steel) and Newcastle (long steel) works
  • ▸Evraz Highveld Steel — Witbank (structural steel, rail)

Combined, these operations produce approximately 5–6 million tonnes of crude steel annually, with a significant portion exported to EU member states and processed through EU supply chains.

CBAM Coverage for Steel Products

CBAM covers a wide range of steel and iron products under Annex I of EU Regulation 2023/956, including:

  • ▸Hot-rolled flat products (coils, sheets, plates)
  • ▸Cold-rolled flat products
  • ▸Long products (rebar, wire rod, sections)
  • ▸Tubes and pipes
  • ▸Castings and forgings
  • ▸Ferro-alloys (including ferrochrome and ferromanganese)

The Default Emission Factor

The EU has established a default embedded carbon factor of 2.18 tCO₂/tonne for steel. This default applies when an exporter cannot provide verified actual emission data.

SA exporters have two options:

  1. ▸Use the default — simpler but may overstate your actual emissions if your operations are more efficient
  2. ▸Submit verified actual data — requires third-party verification but can reduce your CBAM liability if your carbon intensity is below the default

Calculating Your CBAM Liability

Example calculation for a SA steel exporter:

| Parameter | Value | |-----------|-------| | Annual EU export volume | 50,000 tonnes | | Embedded carbon (default) | 2.18 tCO₂/tonne | | Total embedded emissions | 109,000 tCO₂ | | EU ETS price | EUR 65.42/tCO₂ | | Gross CBAM liability | EUR 7,130,780 | | SA carbon tax credit (R236/tCO₂ ÷ 20.5 ZAR/EUR) | EUR 1,254,829.268 | | Net CBAM liability | EUR 5,875,950.732 |

Use the CBAM Calculator on this site to calculate your specific exposure.

The Compliance Timeline

| Date | Requirement | |------|-------------| | January 1, 2026 | Full CBAM enforcement begins — financial payments required | | Q1 2026 | Register as Authorised CBAM Declarant in EU CBAM Registry | | Q2–Q3 2026 | Calculate and verify embedded emissions for 2026 exports | | September 30, 2027 | First CBAM certificate surrender deadline |

What SA Steel Exporters Must Do

  1. ▸Register as an Authorised CBAM Declarant in the EU CBAM Registry
  2. ▸Calculate embedded emissions using actual data or EU defaults
  3. ▸Verify your emissions data with an accredited third party
  4. ▸Purchase CBAM certificates equal to your net embedded emissions
  5. ▸Surrender certificates by September 30 each year

Complete your CBAM compliance registration at the Digital Product Passport Registry.

Frequently Asked Questions

Is South African steel subject to CBAM?
Yes. Steel and iron products are one of the six sectors covered by CBAM from January 1, 2026. South African steel exporters shipping more than 50 tonnes per consignment to EU member states must comply.
What is the default embedded carbon factor for steel under CBAM?
The EU default embedded carbon factor for steel is 2.18 tCO₂/tonne. SA exporters can use this default or submit verified actual emission data. Using actual data is advantageous if your operations are cleaner than the default.
Which SA steel companies are most exposed to CBAM?
ArcelorMittal South Africa (Vanderbijlpark and Newcastle works) and Evraz Highveld Steel are the primary SA steel producers with EU export exposure. Downstream processors and service centres that export to the EU are also affected.
How does CBAM interact with the SA carbon tax for steel producers?
SA steel producers paying the domestic carbon tax can claim a deduction against their CBAM liability. However, the SA carbon tax rate (R236/tCO₂ ≈ EUR 11.5/tCO₂) is significantly below the EU ETS price (EUR 65+/tCO₂), so most producers will still face a net CBAM cost.
What documentation do SA steel exporters need for CBAM?
You need: (1) a CBAM declaration covering embedded emissions, (2) third-party verification of your emissions data, (3) proof of any carbon price paid in South Africa, and (4) CBAM certificates equal to the net embedded emissions after deducting the SA carbon tax credit.
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