CBAM starts to bite: Construction material prices edge up in early 2026

Since the EU’s Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on January 1st, the cost of key construction materials – especially steel, aluminium, and cement – has started to rise. While the price impact is still unfolding, early 2026 data shows carbon pricing is being felt across supply chains.

Steel prices have moved first. Hot-rolled coil in Northern Europe rose ~€22/t (up 3.5%) in January, while rebar prices in Italy and Northern Europe climbed by €20–40/t (approx. 5–6%). CBAM has made imported steel more expensive or riskier to procure, giving EU mills stronger pricing power. Buyers report “CBAM is the main driver” of recent hikes, particularly as imports from Turkey and Asia now face added costs and compliance complexity.

In aluminium, the European duty-paid premium has risen by $20/t (6–8%) since late 2025, with market assessments now including a “CBAM premium” to reflect carbon costs on imports. This has increased prices for extrusions and facade systems across the board—even for EU-produced metal.

Cement has seen less visible price change, but import volumes have dropped sharply. With unverified imports facing carbon charges of up to €70–80/t, many buyers are avoiding third-country suppliers altogether. Domestic EU producers have so far held prices steady, but a spring surge could tighten supply and push prices up.

For Irish construction firms, many of whom rely on imports, these shifts are significant. Steel and cement in particular are now more exposed to embedded carbon costs, regardless of origin. CBAM is no longer theoretical – it’s on invoices and in margins.

What to watch:

• CBAM certificate surrender for 2026 emissions begins in 2027, but costs are accruing now.
• EU ETS free allowances are also declining, increasing domestic producer costs.
• Expect suppliers to pass on more carbon costs as the year progresses.