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Study Reveals 10.76% Tariff on Brazilian Steel Heading to Europe, Anticipating Financial Impact and Accelerating Investments in Decarbonization by Gerdau, Usiminas, and CSN Before Effective Charging in 2026.
The environmental cost has fully entered the accounts of Brazilian steelmakers.
A survey by OPIS, a subsidiary of Dow Jones, indicates that the Carbon Border Adjustment Mechanism (CBAM) will add 10.76% to every dollar in iron and steel products shipped from Brazil to the European Union.
The impact begins to weigh in from now on, even though the financial charge is only expected to begin on January 1, 2026, pressuring giants like Gerdau, Usiminas, and CSN to revise their export strategy.
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Cost Increases Are Already Seen in Sales Sheets
Brazil allocated 12.5% of its iron-steel exports to the European market in the last 12 months.
With the CBAM in testing phase since October 2023, importers need to submit quarterly emissions reports.
In just over a year, they will need to purchase carbon certificates calculated based on the weekly average price of EU ETS auctions.
The Trade Exposure Index of 0.942 — the highest in Latin America — reinforces the risk for the sector, which already pays three times more than the average required from European suppliers (3.21%).
How the CBAM Works
Created to “level the playing field” between goods produced within and outside the bloc, the CBAM accounts for the carbon emitted throughout the chain and charges a fee equivalent to the cost faced by European manufacturers participating in the EU Emissions Trading System (ETS).
Between 2023 and 2025, companies only need to report data.
Starting in 2026, each ton of imported steel, aluminum, cement, fertilizers, electricity, and hydrogen will require a certificate backed by the ETS.
The timeline stipulates the delivery of the first credits by February 2027, corresponding to imports from the previous year.
Exemption Gap Remains Narrow
Despite discussions in Brussels, analysts consider a broad amnesty unlikely.
The European Commission even proposed excluding up to 80% of importers to reduce bureaucracy, but the eligible volumes are minimal.
In last May, the European Parliament supported excluding loads below 50 tons annually from the scope and delaying the mandatory purchase of certificates until 2027 — a change that affects only 1% of the emissions involved.
Thus, the bulk of the bill remains for those who ship large volumes, such as Brazilian steelmakers.
Expensive Bill for National Steel
OPIS’s study estimates that the average rate of 10.76% is equivalent to over US$ 100 per ton, provided the carbon price stays within the range of €90 to €110 projected for 2026.
With tight margins already, companies need to decide whether to absorb part of the cost or pass it on to the end customer.
In both scenarios, the competitiveness of Brazilian steel deteriorates compared to North American producers, who do not pay the tariff when selling within the United States.
Gerdau Accelerates Green Steel Projects
Half of Gerdau‘s revenue comes from North America, but the company maintains a steady flow of high-value semifinished products to Europe.
To mitigate risks, it announced investments of R$ 3.2 billion until 2026 in expanding mining capacity and low-carbon technology in Brazil, in addition to reinforcing the use of metal scrap and electric furnaces in North American operations — a route exempt from the CBAM.
Usiminas Adapts Emission Inventories
Usiminas exports plates and galvanized sheets that feed the European automotive industry.
The latest sustainability report confirms alignment with the GHG Protocol and details the construction of an emission inventory compatible with the spreadsheets required by Brussels.
The company is discussing sales contracts with a “CO₂ neutral FOB” clause to avoid additional costs for the buyer.
CSN Maps Carbon Footprint
CSN diversifies exports among steel, iron ore, and cement.
In a results teleconference, the board listed “mapping of the carbon footprint” as a priority for 2025, a step considered fundamental to avoid surcharges to European customers.
The company is also analyzing the partial conversion of blast furnaces to routes using natural gas and, in the future, green hydrogen.
Political Shock in Brussels
Amid the technical process, the discussion took on political contours.
The European Commissioner for Climate, Wopke Hoekstra, advocates limiting the CBAM to the 20% of importers responsible for 97% of emissions, reducing obligations for small firms without changing the fee per ton of CO₂.
Parliamentarians, in turn, voted to extend the exemption to 90% of companies, but only delay the charge — not the elimination — of the certificates.
For experts, the measure simplifies paperwork, but does not change the game for carbon-intensive producers like Brazil and Turkey.
What Needs to Be Done by 2026
Brazilian steelmakers need to meet a series of steps: inventory emissions from each plant according to the European methodology, certify supply chains — from coke to electricity — and negotiate contracts that already internalize the cost of carbon or pass the difference on to the buyer.
Above all, it is necessary to invest in lower emission technological routes, such as electric furnaces powered by scrap or green hydrogen.
Monitoring the behavior of the EUA Allowance, a reference for the price of certificates, has also become routine in planning departments.
Deadlines to Watch
The calendar is tight.
The last quarterly report of the transitional phase must be sent by January 31, 2026.
The day after, the financial obligation begins to accumulate, calculated retrospectively on each shipment.
The delivery of the first certificates, corresponding to the year 2026, is scheduled for February 2027.
Meanwhile, the European Commission will publish the CBAM review in the fourth quarter of 2025, which may include sectors such as auto parts and machinery, expanding the scope of the tariff.
Why the Topic Should Gain Visibility
The combination of a tight deadline, direct impact on steel costs, and potential pass-through to the prices of cars, appliances, and public works should elevate the CBAM to the top of search agendas and headlines.
Moreover, the tension between strict climate targets and the need to maintain industrial competitiveness provides both economic and environmental appeal, a boon for content recommendation algorithms.
Will the sector manage to turn the race for decarbonization into a competitive advantage before the European tariff begins to impact the bottom line?
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