What is CBAM? Why Does it Affect You as a Buyer?
- Catrina
- 2 days ago
- 8 min read
Imagine signing off on a large container order of outdoor garden storage solutions — only to realize a few months later that your landed cost just increased by 20% due to something called CBAM.
You scramble to understand what happened. You didn’t change suppliers. The product quality is identical. Logistics haven’t changed. And yet, your pricing now risks your margins — or worse, your contract with your largest retail partner.
The problem? You were hit by the Carbon Border Adjustment Mechanism (CBAM) — and you didn’t even know it was coming.
The European Union has started enforcing CBAM on certain product categories, and by 2026, buyers of construction materials, metals, and even some garden product components will be fully liable. If your supplier hasn’t aligned with EU carbon regulations, you will pay the price — literally.
But here’s the good news: by understanding CBAM now, you can take strategic steps today to protect your supply chain, cost structure, and brand reputation tomorrow.
Let’s walk through everything you need to know as a European buyer.
Stay ahead of regulatory surprises. Contact us at Hongmao Garden to assess CBAM risk in your supply chain.
CBAM is an EU carbon regulation impacting imports. Learn how it affects your product costs, which items are included, and what you can do as a procurement leader.
As someone who has worked with countless procurement professionals across Germany, Austria, and the Netherlands, I know the pressure you face. Between juggling price negotiations, compliance requirements, and evolving sustainability demands — it’s easy to feel like the ground keeps shifting.
And now, CBAM has entered the mix.
The Carbon Border Adjustment Mechanism isn’t just another acronym on your radar. It’s a policy that will impact cost forecasts, supplier choices, product sourcing, and ESG compliance for nearly every furniture and garden brand operating in Europe. CBAM will initially hit sectors like steel, aluminum, and cement — materials commonly used in outdoor storage products.
But make no mistake: this is not a niche rule. If you purchase goods from outside the EU, you need to understand how CBAM will expand, what emissions data you’ll be required to submit, and how it could change the way you select manufacturing partners.
In this blog, I’ll explain CBAM in a practical, procurement-focused way — based on my 20 years in garden product sourcing and supplier qualification. We’ll break it down by:
Whether you’re buying storage boxes for a hardware retailer or negotiating with new ODM suppliers, this guide will give you clarity — and the confidence to act.
Who is affected by CBAM?
You’re not a steel mill, so why should you worry?
As a procurement manager, your world is built on partnerships — and if your partner uses CBAM-covered materials, you’re already affected.
This section uncovers exactly who CBAM touches — from manufacturers to you, the importer.
Even if you don’t manufacture emissions-heavy materials, if your product contains them — like aluminum frames or steel hinges — you’re affected. CBAM applies to importers of goods, not just producers. And guess who the importer is? In many cases, you.
The regulation is designed to close the carbon price gap between EU-made and foreign-made products. That means if your supplier is outside the EU — and their production emits more carbon than EU norms — you’ll be paying a carbon levy to make up the difference.
That levy? It comes out of your cost sheet.
Let’s say you import storage boxes made of powder-coated steel from a Chinese supplier. Your freight terms are DDP, and you are the importer of record.
Now — if the steel in those boxes was produced using high-emissions processes, you’ll be required to declare the embedded emissions, verify them through a certified body, and pay a corresponding CBAM charge.
Here’s the kicker: even if your supplier claims low emissions, you’re still liable unless their data is verified by an EU-approved methodology.
You’re not alone. Many companies are unaware that even plastic parts (if fossil-based), zinc-coated screws, or pre-galvanized hinges may fall under CBAM scrutiny — especially as new phases are introduced.
It’s not about what you make. It’s about what your products are made of.
If you’re unsure about your exposure, now’s the time to start mapping your supply chain and requesting carbon data from your suppliers. Start by identifying all components potentially made from:
Iron and steel
Aluminum
Cement
Fertilizers
Electricity (if imported)
Each of these categories is already under CBAM.
What is the impact of CBAM?
How could this one policy reshape your entire cost structure?
This section explores the financial, operational, and strategic implications of CBAM for procurement managers.
CBAM isn’t just a regulatory headache — it’s a margin killer. For many procurement teams, the true impact of CBAM is hidden until it hits the invoice. Suddenly, you’re paying 5–35% more for the same product, simply due to carbon pricing gaps between regions.
The catch? These surcharges aren’t negotiable. They’re calculated based on verified emissions reports and current EU carbon credit prices. This means your forecasts, pricing models, and supplier selection criteria must change.
CBAM also introduces administrative costs — you’ll need to assign internal resources or hire consultants to manage emissions tracking, verification, and reporting.
Ignoring it is not an option. Companies that fail to comply face blocked shipments, fines, and supply delays. Worse still, a reputation for non-compliance could damage retailer relationships.
Need help calculating how CBAM could affect your landed costs? Book a compliance call with our team.
When I first reviewed CBAM’s draft structure, I immediately thought about our German buyers sourcing aluminum-based garden boxes. One buyer estimated a 12% cost increase — before even including paperwork overhead.
Let’s break it down:
Direct Cost Impact: You’ll have to buy CBAM certificates, priced according to the EU ETS (Emissions Trading System). The fewer allowances your non-EU supplier can claim, the more certificates you must buy.
Operational Impact: Internal systems must track embedded emissions at the product level. This isn’t simple if you buy pre-assembled SKUs.
Compliance Risk: If you misreport — or if your supplier’s emissions aren’t verified — you’re on the hook.
And that’s just the surface. Many procurement teams haven’t yet realized how CBAM changes the game for long-term supplier planning. A previously low-cost supplier might become unviable by 2026 if they can’t cut emissions or provide transparent data.
What is CBAM used for?
Why did the EU introduce CBAM in the first place — and why should you care?
This section explains the purpose behind CBAM and how it supports global climate goals.
The Carbon Border Adjustment Mechanism exists to level the playing field. Without it, EU manufacturers who invest in clean technology are at a disadvantage against cheaper, high-emission imports.
CBAM ensures that the carbon cost of production is factored into imported goods, just as it is for EU producers under the EU Emissions Trading System (ETS). For procurement managers, this means CBAM isn’t just a compliance tool — it’s a signal. It shows which suppliers are investing in sustainability — and which are not.
Understanding its purpose helps procurement teams align sourcing strategies with ESG goals, support long-term profitability, and avoid reputational risks.
Want to align your sourcing with EU climate standards? See how Hongmao’s materials meet CBAM goals.
Think of CBAM as carbon fairness. If one factory pays for their emissions and another doesn’t — the playing field isn’t level.
The EU’s internal carbon pricing already pushes local factories to lower emissions. CBAM extends this incentive to importers, so that high-emission imports don’t undercut cleaner domestic options.
But it’s not just about fairness.
CBAM also serves broader climate goals:
Encouraging Global Reductions: By placing a cost on carbon-intensive goods, the EU nudges international suppliers to decarbonize.
Protecting Green Investment: Without CBAM, EU industries might relocate to regions with lax carbon laws. This is called “carbon leakage.” CBAM stops it.
Promoting Innovation: With clear carbon pricing signals, more suppliers will invest in renewable energy and low-carbon processes.
As a buyer, this gives you a unique role. Your sourcing decisions can drive change not only in price — but in planetary impact.
Which products are CBAM?
Could your best-selling garden product be a hidden CBAM liability?
This section identifies the product categories already included under CBAM — and those likely to be added soon.
CBAM currently covers a targeted group of carbon-intensive imports:
Iron and steel
Aluminum
Cement
Electricity
Hydrogen
Fertilizers
For outdoor product buyers, this list may seem narrow — but the implications aren’t. Many components used in garden structures, sheds, storage boxes, and fences are made of galvanized steel or aluminum alloys. If those raw materials are imported, they fall under CBAM.
The list is expanding. By 2030, polymers, glass, and organic chemicals could be included — and that impacts plastic connectors, painted panels, and even fasteners.
If your supplier doesn’t know the carbon footprint of their materials, you might already be exposed without knowing it.
Not sure if your products fall under CBAM? Ask our compliance team for a quick risk scan.
Let’s look at a few common examples I see in garden procurement every day:
Raised garden beds made with powder-coated galvanized steel
Fences using welded aluminum lattice frames
Storage boxes with a mix of steel plates and aluminum lids
Each of these products contains one or more CBAM materials — and even if they’re assembled outside the EU, the embedded emissions are now subject to reporting and possible charges.
What makes this tricky is that CBAM applies to the embedded emissions in the raw material, not necessarily the final product category. So even if your HS code doesn’t scream “CBAM,” the input materials might quietly qualify.
That’s why you need emissions transparency at the component level.
How to prepare your supply chain for CBAM?
What should you be doing — today — to stay compliant and competitive?
This section offers a proactive roadmap to reduce risk and build resilience in your sourcing strategy.
The worst time to plan for CBAM is after it’s already cost you a shipment or a contract. The best time? Now.
The procurement leaders I admire most are the ones treating CBAM like a transformation opportunity. They’re not just reacting. They’re auditing suppliers, tracking emissions, demanding transparency, and embedding climate compliance into sourcing KPIs.
You don’t need to overhaul your supply chain overnight. But you do need a CBAM-readiness checklist, and you need supplier partners who take this seriously.
Want a free CBAM audit checklist? Download your procurement toolkit here.
Here’s how to get ahead of CBAM, even if your team is small or your resources are stretched:
1. Map Your Materials
Identify which of your SKUs contain CBAM-targeted materials — not just finished goods, but internal parts.
2. Engage Suppliers Early
Ask your current suppliers for emissions data per material type. If they cannot provide it — or worse, don’t understand what CBAM is — consider that a red flag.
3. Build Emissions Into RFQs
Start making embedded carbon a selection criteria in your tenders, alongside price and lead time.
4. Digitize Your Documentation
Use cloud platforms to manage declarations, carbon reports, and verification certificates. This will save headaches later.
5. Diversify Based on Carbon
Even if you’re happy with your current costs, compare them against lower-emission alternatives. The long-term savings might surprise you.
Your action today is your insurance tomorrow.
CBAM isn’t just policy — it’s your new pricing reality. But with knowledge, planning, and the right partners, it doesn’t have to derail your strategy.
Ready to future-proof your garden product sourcing? Connect with me or my team today.
CEO, Hongmao Garden
With over 20 years of experience in sourcing and manufacturing outdoor garden storage solutions, Catrina works closely with leading European wholesalers, top Amazon sellers, and garden brands to build efficient, compliant, and future-ready supply chains.
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