Governments want to know where every tonne of steel and sack of coffee comes from, but their customs posts are still working out where to put the answer.
On January 1 the European Union’s carbon border adjustment mechanism (CBAM) stopped being a reporting exercise and started running up bills. Anyone importing more than 50 tonnes a year of steel, aluminium, cement, fertiliser, electricity or hydrogen now has to be an authorised declarant, with the emissions embedded in each shipment logged against a customs code. By January 7, according to a Commission update, more than 12,000 operators had applied for that status and some 4,100 had actually received it.
Jessika Roswall, the EU’s environment commissioner, had a rougher time with the other big traceability law on the books. In September 2025 she asked for the deforestation regulation (EUDR) to be postponed for a second time, on the grounds that the IT system meant to receive companies’ due-diligence statements (plot-by-plot geolocation for cocoa, coffee, soy, palm oil, timber and the rest) could not cope with the load. The delay was published in the Official Journal on December 23. In February the filing portal was partly switched off so it could be rebuilt. On May 4 Ms Roswall’s simplification review ruled out a third postponement and claimed that compliance costs had already been cut by about 75 per cent. A new release of the system went live in September. Large and medium-sized firms must use it from December 30.
The Organisation for Economic Co-Operation and Development (OECD), a club of mostly rich countries, put numbers on the mismatch this month. Its report, Better Borders for Trade, Traceability and Enforcement, found that fewer than one in five new environmental and social requirements came with a comprehensive plan for how they would be enforced at the border. Notifications of environment-related technical requirements are up by more than 60 per cent in a decade, and about 86 per cent of the due-diligence measures it identified date from 2015 or later. OECD members, on its count, deal with only 55 per cent of the border problems thrown up by rules on a product’s environmental lifecycle (where it was mined or grown, how it was made, what happens when it is thrown away). Critical minerals, medical products and advanced technology goods get singled out as sectors needing particular attention. “For goods to flow, trusted information needs to flow. But collecting and reviewing that information comes with costs for both businesses and governments, and that cost is increasing,” said Mathias Cormann, the organisation’s secretary-general.
Slobodan Minić, a special adviser to Serbia’s Fiscal Council, had already estimated what that cost would look like for his country: around 45 million euros for Serbian exporters this year, rising to 150 million to 200 million euros a year by 2030. Much of it falls on one plant. HBIS, a Chinese state-owned group, bought the Smederevo steelworks in 2016 for 46 million euros and kept its 5,000 or so workers. One of its two blast furnaces has stood idle since mid-2023. It emits about 2.3 tonnes of CO₂ for every tonne of hot-rolled coil and sends roughly 55 per cent of its output to the EU, according to an analysis published in March. Once Serbia’s biggest exporter, it is now third.
Staša Košarac, Bosnia’s trade minister, had asked the Energy Community (a treaty body that extends EU energy rules to its neighbours) to push for a postponement last year. CBAM arrived on schedule anyway. By February electricity traders had begun scaling back cross-border deals between the Western Balkans and the EU, in part because the mechanism cannot tell coal-fired power from hydro in real time.
GMK Center, a steel consultancy in Kyiv, reported in September that Ukraine’s exports of long steel products fell by 41.7 per cent year on year in the first half of 2026, while flat products fell by 8.1 per cent. Research presented at a roundtable in the city in April had put lost export orders in the first quarter alone at more than 1.1 million tonnes. Tighter EU import quotas played a part too.
The OECD reckons that trade-facilitation reforms (single windows, pre-arrival processing, risk-based inspections) have cut trade costs by up to five per cent over the past decade, and that some 4.8 trillion US dollars of trade could benefit from existing regulatory co-operation arrangements if governments made proper use of them. The EU’s own plumbing is on its way, slowly. In March the European Parliament and member states agreed the biggest overhaul of the customs code since 1968, creating an EU Customs Authority in Lille and a single data hub to replace 111 national IT systems. The Council adopted its formal position on September 3. The hub opens for e-commerce in July 2028 and to other traders, voluntarily, from March 2031. It becomes mandatory for everyone in 2034.
The Commission is holding its last scheduled training sessions on the EUDR information system on October 22nd and 27th. The first CBAM certificates, covering this year’s imports, go on sale on February 1 next year.
Photo: Dreamstime.
Trace elements was originally published on Emerging Europe.
