Transparency, price impact, and cooperation in the chain

With this explanation, Archey aims to provide its customers and partners with clear information about the impact of CBAM, the resulting costs, and how we are working with our customers in an explicit and transparent manner.

What is CBAM?

CBAM was introduced by the European Union to prevent CO₂-intensive production from relocating to countries outside the EU with less stringent environmental regulations. By also taxing imported products based on the CO₂ emissions released during production, a more level playing field is created between European and non-European producers.

For fasteners, this mainly concerns steel and iron products imported from outside the European Union. CBAM is not a temporary measure, but part of a long-term strategy and will be further expanded and tightened in the coming years.

Calculation of CBAM costs

In many cases, CBAM costs are currently calculated using standard emission values set by the European Union, known as default values. These values are deliberately set conservatively and are often higher than the actual CO₂ emissions of specific products or production lines. As a result, the calculated CBAM costs, especially in the initial phase, can be considerable and have a direct impact on the cost price of fasteners.

Actual emission values: possibilities and limitations

In theory, the regulations offer the possibility of applying lower, actual emission values based on manufacturer-specific data. In practice, however, this is a complex, costly, and time-consuming process. This is partly because:

• complete and up-to-date emission data per manufacturer and per product group are required;
• In-depth understanding of raw materials, energy consumption, and production processes is required.
• verification by independent, certified third parties is mandatory;
• in many cases, on-site audits at the manufacturer's premises are necessary;
• there is currently still uncertainty about procedures and responsibilities.

As a result, the systematic application of actual emission values is currently limited in its feasibility. Regardless of the chosen methodology, it remains an important principle for Archey to work with manufacturers who produce as efficiently and cleanly as possible, both from a cost control and environmental awareness perspective.

CBAM as a structural component of the cost price

CBAM affects not just one party, but the entire chain. The combination of:

• CO₂ certificate costs;
• additional reporting obligations;
• administrative burdens;
• and ongoing changes in regulations;

makes it impossible for these costs to be borne structurally by a single link in the chain. CBAM thus becomes an inevitable and structural part of the cost price of fasteners throughout the entire market.

Price agreements in consultation with customers

Archey has made a conscious decision not to implement the consequences of CBAM unilaterally, but to actively engage in dialogue with its customers on this issue. CBAM-related costs are included in price agreements and contractual arrangements, based on the following principle:

• realistic and explainable price adjustments;
• predictability and continuity in collaborations;
• agreements that are appropriate to the nature and duration of the relationship.

Price adjustments resulting from CBAM are part of a structural change in the market and are discussed in consultation with customers.

Transparency upon request

Transparency is an important principle in Archey's approach. CBAM costs are part of the total cost price of products. Where necessary and at the customer's request, Archey can provide insight into:

• the origin of CBAM-related costs;
• the manner in which these costs are incurred;
• the impact on specific product groups or collaborations.

This explanation takes place in consultation and does not automatically lead to a fixed or standardized breakdown of CBAM costs on quotations, order confirmations, or invoices.

 

Ongoing communication and contact

CBAM is complex and constantly evolving legislation. Archey closely monitors these developments and continues to proactively inform its clients about:

• relevant changes in legislation and regulations;
• possible consequences for prices and agreements;
• next steps within the chain.

Customers are expressly invited to discuss this matter so that we can work together to find workable, transparent, and future-proof solutions within this new reality.

Finally

Through open communication, clear agreements, and cooperation within the chain, Archey aims to contribute to stability, predictability, and continuity in the supply of fasteners. For questions about the impact of CBAM on products or partnerships, please contact Archey.