Six weeks before the EU’s Carbon Border Adjustment Mechanism transitions from reporting to payment phase, major European multinationals remain unprepared while 72 global markets develop parallel carbon border systems that could reshape international trade dynamics. Marcel Duits, chief CBAM officer at compliance platform Dubrink, reports his team is still conducting introductory briefings in November 2025—a timing crisis that exposes fundamental gaps in corporate readiness for what represents the EU’s most ambitious climate trade policy.
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The mechanism, which began mandatory reporting in Q4 2023, requires importers of steel, iron, aluminum, fertilizer, cement, and electricity to calculate embedded emissions and purchase certificates starting January 1, 2026. Yet the 120-day authorization process for becoming an EU-registered declarant—necessary to import CBAM-covered goods—means companies should have completed registration by August. Duits characterizes the corporate response bluntly: “Scrambling.”
Default Values Loom as Punitive Alternative
From 2026 forward, only emissions data verified by EU-appointed bodies like Bureau Veritas, TÜV, or SGS will qualify for actual emissions reporting. Unverified data triggers default values that Duits describes as “slightly punitive”—industry terminology that masks potentially severe cost implications. The gap between actual and default values averages 30% according to Dubrink’s analysis, creating immediate competitive disadvantage for unprepared importers.
Current CBAM costs range from €40 to €100 per ton on average. Dubrink’s forecasting models project these costs will increase tenfold over the next decade, reaching €400 to €1,000 per ton. With EUA certificates currently trading around €80 but potentially rising to €250, cost predictability becomes a strategic variable. Cement companies that hedged CBAM costs five to six years ago at €20-€30 per ton now hold significant competitive advantages over competitors facing current market rates.
The verification bottleneck compounds timing pressure. The EU has not yet clarified verification procedures for 2026, leaving suppliers uncertain about how to obtain the required certifications. Duits calculates that verification costs exceed savings for suppliers exporting fewer than 100 tons to the EU, creating a threshold below which compliance makes no economic sense—effectively excluding smaller suppliers from European markets.
Organizational Dysfunction Delays Implementation
The compliance challenge reflects organizational rather than technical barriers. Duits observes a pattern of responsibility deflection: “It goes from compliance to sustainability to purchasing to finance. And nobody wants to take ownership.” Purchasing departments assumed their roles would be obsolete by the time CBAM enforcement began. Sustainability teams lacked the authority to commit financial resources. Compliance groups viewed emissions as outside their domain. Finance departments engaged only after importers realized that 2025 shipments entering the EU in 2026 trigger payment obligations in 2027.
This organizational paralysis disproportionately affects large enterprises. Small and medium-sized enterprises demonstrate greater agility, moving from platform evaluation to full implementation within two months. Multinationals remain mired in audit cycles, terms-and-conditions reviews, and interdepartmental approval processes. One major Dutch multinational—Duits declined to name the company—contacted Dubrink in November 2025 to begin CBAM implementation, illustrating how even sophisticated organizations underestimated regulatory timelines.
The 50-ton threshold introduced in the Omnibus regulation—replacing the original €150 value trigger—attempted to reduce compliance burden but created uneven impacts. For steel coil importers, 50 tons represents straightforward volume tracking. For companies receiving fragmented shipments via FedEx and DHL, aggregating 50 tons across multiple small packages remains administratively complex.
Geographic Arbitrage and Strategic Decarbonization
The International Association for CBAM recently quantified a counterintuitive finding: national carbon pricing policies deliver greater CBAM cost reductions than individual factory decarbonization efforts. This multiplier effect incentivizes governments to implement domestic carbon mechanisms that allow producers to pay emissions costs locally—costs then deductible from EU CBAM obligations.
Duits projects that in 2026, third-country producers paying €15-€45 under recognized domestic systems could eliminate CBAM costs for EU importers. This creates powerful incentives for countries to capture revenue that would otherwise flow to Brussels while simultaneously driving national decarbonization. The EU’s acknowledgment that 72 markets are developing CBAM-equivalent systems suggests this dynamic is already unfolding.
Turkey presents a critical test case. Turkish steel suppliers with high emissions face dual pressures: potential exclusion from EU markets due to CBAM costs, and incoming competition from displaced producers seeking markets without carbon pricing. Duits warns that Turkish suppliers should be “very worried about competition joining my market because they can’t now enter the EU anymore, or they can, but they’re going to be very expensive.”
China’s response demonstrates sophisticated strategic positioning. While expanding coal capacity, China simultaneously develops “green zones” hosting ultra-low-emission facilities capable of producing at near-zero carbon footprints. This dual approach positions Chinese exporters to dominate both conventional and premium low-carbon markets. Producers achieving verification for minimal emissions gain competitive advantages in CBAM markets while maintaining cost competitiveness through scale in domestic production.
Bosnia, Serbia, and similar markets without carbon pricing systems face becoming dumping grounds for high-emission products excluded from regulated markets. This creates secondary market distortions where environmental standards fragment rather than converge, undermining CBAM’s stated goal of preventing carbon leakage.
The 2.5% Misconception and Cost Reality
A persistent misconception plagues CBAM understanding: the belief that 2026 costs will equal 2.5% of import values. This figure appears in the CBAM calculation methodology but represents only one component of the formula. Duits reports encountering EU companies adding 2.5% to invoices and claiming “your CBAM is covered”—a fundamental miscalculation that understates actual costs by more than 60%.
The benchmark deduction mechanism adds further complexity. The EU intends to exempt emissions inherent to production—calculated from the 10 cleanest installations for each product category—from CBAM obligations. However, benchmark data remains unreleased as of November 2025, forcing forecasting models to rely on assumptions rather than official figures. Similarly, 2026 default values have not been published, creating uncertainty about the penalty magnitude for unverified emissions.
Scope expansion looms as the next major disruption. Current regulations cover primary products: steel coils, bars, cement blocks, and similar items. Screws represent an exception—finished goods already subject to CBAM despite being manufactured products. Industry observers anticipate announcements extending coverage to towers, machine parts, and automotive components.
This triggers cascading pressure. Machine manufacturers facing CBAM costs will lobby for machinery inclusion to prevent a competitive disadvantage against imported finished equipment. Textile producers using more expensive CBAM-affected machinery will seek coverage extension to textiles. The circumvention risk drives this expansion: producing finished goods outside the EU and importing completed products currently avoids CBAM on component materials.
Duits predicts chemicals will follow current materials into the CBAM scope, then ceramics and glass. The timeline remains speculative, but the directional momentum appears inevitable. Each scope expansion multiplies compliance complexity and extends CBAM’s economic impact deeper into manufacturing supply chains.
Bootstrap Efficiency Versus Venture Capital Burn
Dubrink’s pricing strategy exposes structural differences in the CBAM compliance market. Venture-backed competitors in Berlin and London raised millions in seed funding, hired aggressively, then faced extended sales cycles as CBAM implementation slowed. High burn rates prevent price reductions that would depress valuations and jeopardize Series A funding. Some platforms risk abrupt shutdowns if investor support evaporates.
Dubrink bootstrapped, with founders foregoing salaries for six months before achieving profitability. This capital efficiency enables aggressive pricing while maintaining sustainable unit economics. The platform achieved 0.0001% calculation accuracy—the deviation stemming from EU template rounding differences rather than algorithmic errors—and secured International Association for CBAM certification.
The competitive strategy emphasizes partnerships over direct client acquisition. Dubrink provides white-label calculation engines to customs specialists and competitors, positioning itself as infrastructure rather than customer-facing software. This approach accelerates emissions database growth: when one importer requests supplier data, subsequent importers from the same supplier access pre-existing emissions profiles after obtaining authorization.
Duits frames this as learned wisdom from his previous venture, fashion brand Bybra. “In my previous company, I saw competition as something unpleasant. I felt unhappy when I saw them at trade shows,” he explains. “After I sold that company, I realized if I ever start a company again, I’m going to change that. Because if there’s one person who knows what you are doing every day and what you’re trying every day, then it’s actually your competitor.”
This collaborative approach extends across the CBAM ecosystem. Dubrink partners with customs software providers, offering specialized calculation capabilities while clients leverage existing customs infrastructure. The division of labor recognizes that tracking emissions across dozens of emerging national regulations exceeds the capacity of generalist software providers.
Data Sovereignty and Privacy Architecture
Dubrink’s data governance policies address competitive intelligence concerns that plague platform business models. Suppliers authorize specific importers to access their emissions data rather than granting platform-wide visibility. The platform prohibits using aggregated client data to generate competitive insights—for example, informing new clients about low-emission suppliers discovered through competitor activity.
Duits articulates the privacy principle: “I can’t imagine that it takes you 10 years to build a relation with a specific Chinese supplier somewhere in the north, which all your competitors don’t know about. And then suddenly, a platform will tell you, ‘Hey, have you ever thought about this company? They have amazing emissions.'”
This stands in contrast to data monetization strategies Duits observes among competitors. Platforms viewing CBAM data as assets for predictive analytics or supplier recommendations risk deterring sophisticated clients, protective of supply chain intelligence. The business model examination matters: companies should evaluate whether platform economics depend on data exploitation beyond direct compliance services.
The four-year audit retention requirement creates archival obligations that many importers underestimate. Companies must preserve CBAM calculations and supporting documentation through potential EU audits occurring years after imports. Personnel turnover compounds this risk—the employee with CBAM expertise may have departed before audit inquiries arrive. Dubrink generates audit reports for every import transaction, creating contemporaneous documentation that survives organizational changes.
Regional Divergence in Compliance Attitudes
Western European clients, particularly Dutch and Belgian companies, demonstrate proactive compliance approaches. Duits attributes this to cultural factors: “I see Dutch people being very proactive. They want to be the best in class. So the sooner they have it done, the better.” These companies engage CBAM platforms months before deadlines, complete implementation within standard timelines, and seek competitive advantages through early adoption.
Central and Eastern European importers exhibit different patterns. Historical experience with government mandates that failed to materialize creates skepticism about regulatory follow-through. Companies in these markets delayed preparation, assuming CBAM would be postponed or substantially modified. This has left the region less prepared as the January 2026 deadline approaches.
However, lower labor costs in Eastern Europe enable alternative compliance strategies. Rather than investing in automation platforms, companies can hire additional staff to manage manual reporting processes. This partially offsets the competitive disadvantage of late preparation, though it creates ongoing operational costs and scalability limitations compared to automated approaches.
The UK’s response impresses Duits as the most pragmatic among major markets. Rather than requiring certificate purchases through an exchange mechanism, the UK converts CBAM obligations into straightforward tax calculations at fixed percentages. This simplifies importer compliance while achieving equivalent environmental outcomes. The partnership approach with the EU—coordinating systems rather than creating conflicting requirements—demonstrates regulatory sophistication.
The Scrap Loophole and Regulatory Evolution
CBAM contains acknowledged imperfections that the European Commission continues to address. The scrap loophole allows exporters to blend recycled materials into production, reducing reported emissions without corresponding environmental benefits. Recent proposals aim to close this gap, though implementation details remain under development.
Duits frames these gaps as inevitable in first-generation regulation: “This is kind of the first time in the world that we’re doing this. They also have to learn, you know, they are not perfect.” The Omnibus regulation demonstrated willingness to adjust based on implementation feedback, eliminating requirements to calculate finishing process emissions and raising materiality thresholds.
The benchmark mechanism—deducting unavoidable production emissions from CBAM obligations—represents sophisticated policy design that acknowledges technical realities. However, delayed benchmark publication creates forecasting uncertainty. The communication template that suppliers must complete represents another friction point: Duits describes it as among the most complex Excel files he encountered during his Unilever career, creating barriers for non-English-speaking factories.
Dubrink’s platform bypasses the communication template entirely, allowing suppliers to construct supply chains through intuitive interfaces rather than navigating multilingual spreadsheets. This addresses practical implementation barriers while maintaining regulatory compliance—the type of innovation that emerges when operators with implementation experience design solutions rather than when policymakers create requirements in isolation.
Strategic Implications Beyond 2026
CBAM’s permanence appears assured despite criticism and implementation challenges. Canceling the mechanism would destabilize the EU Emissions Trading System, undermining billions in infrastructure investment predicated on carbon pricing. European manufacturers using emissions-optimized equipment cannot compete on cost alone against producers without carbon constraints. CBAM creates the regulatory architecture that makes sustained environmental investment economically rational.
The hedging strategies available to sophisticated importers create tiered competitive structures. Companies that secured EUA certificates years ago at €20-€30 per ton face fundamentally different economics than late entrants paying €80-€120. This cost disparity—potentially 4x to 6x between early and late movers—determines market positioning and profit margins for the next decade.
Success in CBAM-affected sectors increasingly depends on supply chain transparency and supplier relationship depth. Importers with long-established supplier networks and collaborative relationships secure verified emissions data more readily than those with transactional procurement models. The administrative burden of obtaining emissions documentation from dozens of suppliers across multiple countries favors consolidated supply chains and strategic partnerships.
The timeline from CBAM introduction to operational normalization remains uncertain. Duits projects two years before tools, processes, and organizational knowledge bases mature sufficiently that CBAM becomes routine rather than crisis management. This assumes continued regulatory stability—a significant assumption given scope expansion discussions and ongoing policy refinement.
The accountancy analogy Duits employs captures the transformation: implementing comprehensive bookkeeping requirements across an entire economy initially appears overwhelming, but eventually becomes standard practice through systematic tool development and knowledge diffusion. CBAM represents early-stage implementation chaos that will resolve into business-as-usual operations as the regulatory ecosystem matures.
For now, the six-week countdown to mandatory compliance exposes how regulatory ambition collides with corporate readiness. Major multinationals scrambling to understand basic requirements while SMEs complete implementation illustrates that organizational size provides no immunity to policy disruption when leadership fails to prioritize emerging regulations. The €400-€1,000 per ton costs projected for 2035 ensure CBAM will remain a strategic priority rather than an administrative checkbox—assuming companies survive the 2026 transition.
