The EU Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026. It prices carbon on certain goods imported into the Union, including many iron, steel and aluminium products. Scrap as such is outside that list. Ferrous waste and scrap under CN 7204 and aluminium waste and scrap under CN 7602 do not require CBAM declarations or certificates. Copper, brass, zinc, lead and nickel are not in the current CBAM metals scope.

The mechanism still changes how mills and remelters value recycled feedstock. A tonne of steel or unwrought aluminium made from scrap carries a different emissions story from blast-furnace or primary metal. That is why CBAM sits next to EU scrap export policy in 2026, even though the two files are legally separate.

What CBAM covers and what it leaves out

CBAM applies to importers of Annex I goods: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. For metals that means pig iron, DRI, many semi-finished and finished steel products, unwrought aluminium, and a long list of wrought aluminium articles. The carbon cost is meant to align those imports with EU Emissions Trading System costs on domestic production.

Scrap is excluded because it is treated as a secondary input, not as a CBAM good. Importing HMS, shredded or UBC into the Union does not trigger the certificate obligation that applies to a coil or a billet. Once that scrap is melted into a CBAM product, the product follows the ordinary rules. Direct process emissions at the melt are in scope; the Commission has said that indirect (electricity) emissions for metals remain out of CBAM for the immediate future.

Post-consumer scrap used in steelmaking is treated, in Commission guidance, as having zero embedded emissions from prior primary production. The carbon of the original ore-based metal was counted when that metal was first made. What remains to be reported on the new steel is the furnace process and any other precursors, such as DRI or pig iron.

Pre-consumer scrap and the 2026 debate

Pre-consumer scrap is factory arising: clippings, stampings, offcuts that never became a finished product in use. The Commission has been concerned that operators can label that stream as post-consumer scrap and understate emissions. In late 2025 it signalled work to bring pre-consumer scrap into CBAM as a good or as a precursor with assigned emissions.

In June 2026 the Council’s general approach on the downstream CBAM expansion included pre-consumer steel and aluminium scrap as a precursor. That is a negotiating position, not adopted law. Post-consumer scrap remains outside all three institutional positions in that file. European Aluminium has argued that leaving post-consumer scrap out of product accounting is a loophole; Eurofer has objected to bringing pre-consumer scrap in without a dedicated impact assessment. Trilogue will decide the text. Until then, yards should not price a lot on a CBAM treatment that is not yet in force.

How this affects European recycling

CBAM does not tax scrap leaving the EU. It taxes covered metal coming in. The industrial effect is indirect. EU mills paying ETS on blast-furnace routes, and importers paying CBAM on ore-based steel, have a stronger reason to melt scrap in electric-arc furnaces, provided electricity and verification support the claim. That is one of the arguments in the Steel and Metals Action Plan for keeping more scrap at home.

For a seller, the relevant questions are still grade, quantity and destination. A Turkish EAF selling longs into Europe will care about verified emissions and about scrap quality, including copper residuals in shredded and HMS. An Indian or non-OECD mill buying EU waste scrap is more exposed to shipment rules than to CBAM on the scrap itself.

Aluminium remelted into unwrought metal (CN 7601) is a CBAM good when imported. The scrap that fed that remelt (CN 7602) is not. Traceability of scrap share will matter more as CBAM factors rise from 2026 onward and as actual emissions, rather than defaults, become the way to show a low-carbon melt.

What to put on a lot

Name the grade, tonnes, packing and place. If the buyer is an EU mill or an exporter of CBAM goods, they may ask whether the arising is post-consumer or pre-consumer (new production offcuts versus obsolete scrap). Say so if you know. Do not claim a CBAM saving on the scrap parcel; the saving, if any, sits on the metal made from it.

Verified companies can list on live lots or wanted. Request access if you have feedstock or a melt to cover.

CBAM in 2026 prices imported steel and aluminium products, not the scrap codes 7204 and 7602. Pre-consumer scrap may be pulled into the calculation later. Until the law says so, a European lot is still sold on specification and destination, not on a carbon certificate attached to the skip.