EU CBAM: what exporters in Saudi Arabia and North Africa need to prepare in 2026

What CBAM is

The Carbon Border Adjustment Mechanism, set by Regulation (EU) 2023/956, puts a carbon price on certain goods imported into the European Union. It mirrors the price that European producers pay under the EU Emissions Trading System (EU ETS), so that imports and European production carry a comparable carbon cost.

The legal obligation sits with the authorised CBAM declarant in the EU, usually the importer. But the declarant can only report actual emissions with data from the producer. For a Saudi exporter, CBAM is therefore a customer requirement: the quality of your data affects your client's cost, and your competitiveness.

Key dates

• 1 Oct 2023 – 31 Dec 2025Transitional period: quarterly reports on embedded emissions, no payment.
• 20 Oct 2025The CBAM simplification regulation enters into force.
• 1 Jan 2026Definitive period starts. Emissions embedded in goods imported from this date carry a financial obligation.
• 1 Feb 2027Sale of CBAM certificates begins, covering 2026 imports.
• 30 Sep 2027First annual CBAM declaration and surrender of certificates, for 2026 imports.
• 2026 – 2034The CBAM obligation phases in as EU ETS free allocation is phased out for the same sectors.

Goods covered

Coverage is defined by customs (CN) codes listed in the regulation. The first step for any exporter is to check each product's CN code against the list.

The 2025 simplification

A simplification regulation, published in the EU Official Journal on 17 October 2025, changed several practical rules before the definitive period started:

• A 50-tonne threshold. Importers bringing in less than 50 tonnes of CBAM goods per calendar year are exempt. The threshold does not apply to electricity or hydrogen. Large importers, which are the typical buyers of Saudi steel, aluminium and fertilisers, remain fully in scope.
• Later deadlines. The annual declaration and the surrender of certificates are due by 30 September of the year following import.
• Certificate pricing. Certificates for 2026 imports are priced at the quarterly average of 2026 EU ETS allowance prices. After that, the weekly average of EU ETS auction prices applies.
• Lighter quarterly holding. Declarants must hold certificates covering 50% of the embedded emissions imported since the start of the year.
• Verification only for actual values. Emissions reported with actual data must be verified by an accredited verifier. Default values do not need verification.

How embedded emissions are calculated

CBAM works with specific embedded emissions: the emissions per tonne of product, at installation level, including the emissions of relevant precursors used in production.

For aluminium and steel, the precursors often weigh more than the installation's own emissions. An extrusion plant that buys unwrought aluminium must obtain the embedded emissions of that metal from its supplier, or use default values.

The importer's final cost also depends on the certificate price, the adjustment for the free allocation EU producers still receive, and any carbon price effectively paid in the country of production, which can be deducted with evidence.

Default values or actual data

Where actual data is not available, declarants may use default values published by the European Commission. Under the simplified rules, these defaults are based on the average emission intensity of the ten highest-emitting exporting countries for each product.

For an efficient producer, defaults will usually overstate emissions and raise the importer's cost. Actual, verified data is how a Saudi producer turns lower emissions into a commercial advantage.

What your importers will ask

• Installation identity: name, address, coordinates and economic activity.
• CN codes of the goods and the production route used.
• Specific direct embedded emissions and, where relevant, indirect emissions, with the reporting period.
• Precursors used, their origin and their embedded emissions.
• The monitoring methodology and data sources.
• Evidence of any carbon price paid in the country of production.
• A verification report from an accredited verifier when actual values are used.

A seven-step plan

1. Map your exposure. List products exported to the EU, their CN codes, volumes and the importers involved.
2. Define installations and production routes for each covered product.
3. Set up monitoring of fuels, process inputs, electricity and production volumes.
4. Collect precursor data from your suppliers, or document the use of default values.
5. Calculate specific embedded emissions per product and per period.
6. Prepare for verification with complete evidence and a clear audit trail.
7. Share the data with your importers in a consistent format, and estimate the cost exposure together.

Sedra's CBAM module covers these steps: installations and CN codes, product-level calculations including precursors, the communication file for importers, and a cost exposure simulator at the carbon price you enter. Talk to our team about your products.

A note for North African exporters

For exporters in Morocco, Tunisia, Algeria and Egypt, the European Union is a leading export market. Fertilisers, cement, iron and steel and aluminium are among the goods most exposed, which makes CBAM a direct commercial issue for many industrial companies in the region.

The steps are the same as for Saudi producers: identify covered products, monitor installation emissions, collect precursor data and prepare verified data for EU importers. Sedra supports this work in French, Arabic and English.

Sources

• European Commission, Carbon Border Adjustment Mechanism
• Regulation (EU) 2023/956 establishing a carbon border adjustment mechanism
• Mayer Brown, EU adopts CBAM simplification regulation (October 2025)

This guide is general information, not legal advice. CBAM rules and implementing acts continue to evolve; check the European Commission's guidance and your importers' requirements before acting.