CBAM and fasteners

Transparency, Price Impact, and Collaboration in the Supply Chain

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

What is CBAM?

The European Union introduced the CBAM to prevent CO₂-intensive production from shifting 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 primarily 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 it will be further expanded and strengthened 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 have been 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 substantial and have a direct impact on the cost price of fasteners.

Actual Emission Values: Possibilities and Limitations

In theory, the regulations allow for the use of lower, actual emission values based on manufacturer-specific data. In practice, however, this is a complex, costly, and time-consuming process. This is due, among other things, to the following:

• Complete and up-to-date emissions data by manufacturer and by product group are required;
• a thorough understanding of raw materials, energy consumption, and production processes is required;
• verification by independent, certified third parties is required;
• in many cases, on-site audits at the manufacturer's facility are necessary;
• There is currently still some uncertainty regarding procedures and responsibilities.

As a result, the systematic application of actual emission values is currently only feasible to a limited extent. Regardless of the methodology chosen, it remains an important principle for Archey to collaborate with manufacturers who produce as efficiently and cleanly as possible, both for the sake of cost control and environmental awareness.

CBAM as a structural component of the cost price

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

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

makes it impossible for a single link in the chain to bear these costs on a structural basis. CBAM thus becomes an unavoidable and structural component of the cost price of fasteners across the entire market.

Pricing agreements in consultation with customers

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

• realistic and justifiable price adjustments;
• predictability and continuity in partnerships;
• terms that are appropriate given the nature and duration of the relationship.

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

Transparency Upon Request

Transparency is a key principle of Archey’s approach. CBAM costs are included in the total cost of products. Where necessary and at the customer’s request, Archey can provide insight into:

• the source of CBAM-related costs;
• how these costs are calculated;
• the impact on specific product groups or partnerships.

This explanation is provided on a case-by-case basis and does not automatically result in a fixed or standardized breakdown of CBAM costs on quotes, order confirmations, or invoices.

 

Ongoing communication and contact

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

• relevant changes in laws and regulations;
• possible implications for prices and agreements;
• next steps within the supply chain.

Customers are strongly encouraged to engage in a dialogue on this topic so that, together, we can seek workable, transparent, and future-proof solutions within this new reality.

In conclusion

Through open communication, clear agreements, and collaboration throughout the supply 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.