EU imports from Serbia in 2025 included about $640.7 million of iron and steel under HS Chapter 72 and another $573.5 million of articles of iron or steel under Chapter 73, creating a gross trade envelope of roughly $1.21 billion. Not all of those goods are covered by the EU Carbon Border Adjustment Mechanism, but a large share of Serbia’s main steel exports fall within the current carbon-border perimeter. EU data used in a new steel safeguard framework also show imports of the concerned products rising from 657,318 tonnes in 2024 to 760,234 tonnes in 2025.
CBAM coverage overlaps with Serbia’s core EU steel export volumes
The increase in 2025 is described as almost a 16% rise in a single year, producing what the source describes as a double border test. Serbian exporters are expected to preserve physical access to their largest market while also proving the carbon content of the material sent there. For HBIS Group Serbia and downstream fabricators, competitiveness is described as moving beyond price, specification and logistics toward verified embedded emissions.
The Smederevo steelworks is identified as a key starting point because HBIS Group Serbia is described as the country’s dominant primary steel producer. The supply chain extends into processors, fabricators, construction-product manufacturers, machinery suppliers and exporters. The source also notes that limiting CBAM exposure to one primary producer would miss parts of Serbia’s exposure linked to downstream trade.
EU imports from Serbia under Chapter 73 alone were worth more than $570 million in 2025. The largest lines included approximately $209 million of steel structures and structural parts, almost $147 million of other iron and steel articles, around $40 million of tubes and hollow profiles, and more than $26 million of screws, bolts and related fasteners. The source states that many exporters in these categories do not operate blast furnaces or produce crude steel.
For downstream manufacturers, the emissions incorporated in a qualifying precursor can become central to emissions assigned to the final CBAM good. This means a fabricator can have lower direct emissions at its own site but still face substantial CBAM exposure because of embedded emissions in the steel it buys. The carbon file is described as following the material.
The source cautions that broad trade values should not be treated as exact CBAM exposure because CBAM applies according to specified CN codes rather than broad industry labels. Most of Chapter 72 is included, but exclusions are cited, including ferrous waste and scrap under HS 7204 outside the current Annex I list and specified ferro-alloys. Chapter 73 is described as more selective, with some downstream product families covered while others are not.
A first-pass mapping based on Serbia’s 2025 trade suggests around €960 million of the roughly €1.07 billion broad HS72-plus-HS73 envelope falls clearly inside current CBAM headings. That would imply indicative coverage close to 90%, with reconciliation required at CN8 level before treating it as an audit-grade total. The source concludes that CBAM reaches deep into Serbia’s EU-facing steel industry.
Safeguard measures add customs and market-access constraints alongside carbon reporting
The carbon-border shift is described as arriving as the EU tightens steel trade protection through bilateral safeguard measures. In August, the European Commission adopted rules implementing those safeguards for steel products originating in countries with which the EU has free-trade agreements, including Serbia. The Commission’s analysis cited imports from Serbia at 664,743 tonnes in 2023, 657,318 tonnes in 2024, and 760,234 tonnes in 2025.
The EU described the increase over the 2023-2025 period as 14%, with the jump between 2024 and 2025 described as about 15.7%. The source states that the safeguard product basket is not identical to the CBAM product basket and should not be conflated with it. Commercially, it says both mechanisms meet at the same factory gate for producers managing multiple constraints.
A Serbian producer may need to manage tariff-rate or safeguard constraints, product origin requirements for EU access, EU customer demand, carbon data needs and the price of CBAM certificates simultaneously. This is presented as creating a broader challenge than calculating emissions alone because market access depends on both trade rules and carbon documentation. The source frames this as requiring protection of market access while reducing the carbon cost associated with that access.
Evidence requirements focus on installation-level data for embedded emissions
The domestic production backdrop is also described as weakening for basic metals. Serbian industrial production data show output in basic metals down 12.5% year on year in January-July 2026, with July alone substantially weaker than a year earlier. At the same time, exports from fabricated metal products excluding machinery and equipment increased 20.8% in January-July according to the National Bank of Serbia.
The source says these indicators are not contradictory because primary and basic-metal production can weaken while downstream exporters continue performing strongly using existing inventories, imported materials, different product mixes or stronger foreign demand. It adds that CBAM connects these parts of the chain by making emissions information relevant across precursor suppliers and downstream exports. It notes that processors exporting structures or fasteners can depend on emissions information originating upstream.
For a steel producer seeking to provide actual emissions to an EU customer, data requirements are described as no longer being general ESG estimates. Calculations must be linked to a defined installation, production process and reporting period rather than broad estimates. The source lists elements for building a controlled evidence file including installation identity and boundaries; production route; fuel consumption and process emissions; material and energy balances; production volumes; precursor quantities; embedded emissions of relevant precursors; allocation methodology; metering and laboratory records; monitoring plan; calculation files and data controls; product quantities and CN classification; EU customer and authorised declarant linkage; and independent verification where actual values are used.
The source states that for integrated steel production much of this information sits inside a single industrial system. For downstream processing it says embedded-emissions calculations become harder because manufacturers need precursor emissions tied to inputs entering their plant. It adds that accurate embedded emissions for complex CBAM goods cannot be calculated without knowing emissions associated with precursor materials supplied upstream.
Default values rise over time under definitive-period rules
The source highlights procurement changes for Serbian manufacturers because purchasing departments become part of carbon-control systems under CBAM requirements for embedded emissions. It describes how a structure producer may buy coil, plate, tube or other semi-finished inputs and transform them into final exported products while historically procurement focused on grade, dimensions, chemical properties, certification, price and delivery. Under CBAM it says additional questions arise around which installation produced precursors, which production route was used, specific embedded emissions values based on actual verified data or default values, purchased quantities and allocation to final exported products.
The source also describes reconciliation challenges involving consumption versus stock movements, scrap, yield and production records when supplier information is incomplete or unavailable for embedded-emissions calculations. It states that where suppliers cannot provide usable information EU importers may rely on default values tied to definitive-period rules designed to be conservative. For iron and steel and aluminium it cites default mark-ups carrying a 10% mark-up in 2026, rising to 20% in 2027 and 30% from 2028 onward.
This creates an incentive described by the source toward developing verified actual emissions where those values are competitive rather than relying on increasingly conservative defaults over time. It says this can result in differences between suppliers based on their ability to provide timely verified installation-level information versus partial data versus reliance on defaults by customers. For EU buyers comparing otherwise similar Serbian suppliers it notes that differences can appear through carbon cost impacts tied to imported products.
Renewable electricity does not remove direct embedded-emissions liability for current scope
The role of renewable electricity is described as needing careful treatment under current definitive CBAM scope for iron and steel products subject to direct embedded emissions rather than indirect electricity emissions. The source says renewable PPAs and on-site solar plants can reduce corporate emissions improve ESG performance support future decarbonisation and potentially become increasingly important as CBAM develops. It adds that buying renewable electricity does not automatically remove immediate CBAM liability associated with direct steelmaking emissions under current scope.
The source identifies blast-furnace/basic-oxygen-furnace routes as facing central challenges tied to carbon intensity of production processes themselves rather than electricity sourcing alone. It also states HBIS has pursued renewable-energy initiatives at its Smederevo site including planning for solar generation while noting these investments should not be presented as a simple one-for-one solution to current CBAM exposure because technology fuels material inputs and production route remain central decarbonisation questions.
CBAM certificate pricing links carbon costs to ETS auction levels
The source cites an EU ETS-linked certificate price published by the European Commission: €75.36 per tonne of CO₂ for Q1 2026 and €75.28 for Q2. It states that calculating the actual cost attached to a tonne of Serbian steel cannot be done by simply multiplying gross plant emissions by €75 because final numbers depend on relevant embedded emissions benchmark or free-allocation adjustments any recognised carbon price already effectively paid and other regulatory parameters.
The certificate price is presented by the source as giving scale because even relatively small differences in verified embedded emissions can translate into meaningful differences across hundreds of thousands of tonnes at around €75 per tonne CO₂ level referenced there. It adds that this makes emissions data commercially material rather than only information for sustainability reporting because contract terms can incorporate carbon risk tied to evidence quality.
Definitive-period guidance sets verification timing for 2026 imports
The source says EU buyers may seek more specific CBAM provisions from non-EU suppliers through commercial contract clauses covering data-delivery deadlines verification rights access to installation information accuracy warranties treatment of default values precursor data allocation methodology liability where incorrect data increases buyer CBAM cost and cooperation with accredited verifiers. For Serbian exporters it warns against treating such clauses as routine legal appendices because they determine who carries financial risk if evidence fails.
The European Commission published dedicated definitive-period steel guidance referred to as Guidance 5d on Aug. 14 followed by verification and accreditation guidance later that month according to the source. The first annual CBAM declaration covering 2026 imports is due by Sept. 30, 2027. Where actual emissions are used it says those values must be verified.
The source states this means Serbia’s steel industry needs its 2026 production evidence organized during 2026 rather than waiting until 2027 due to risks such as meters not aligning with production boundaries missing precursor documentation ERP record reconciliation problems inability to provide historical installation-level data or difficulty allocating production batches retrospectively across exported shipments.
Cronstruction-product supply chains depend on audit-ready precursor documentation
The evidence file requirements are described as extending upstream into precursor suppliers because downstream manufacturers cannot calculate accurate embedded-emissions values without knowing precursor-material emissions entering their plants. This shifts procurement questions toward installation identity boundaries production route fuel consumption process emissions material balances precursor quantities embedded-emissions allocation methodology metering laboratory records monitoring plans calculation files data controls CN classification product quantities EU customer linkage with authorised declarants plus independent verification where actual values are used.
The source also points out that integrated production may contain much of this information within one industrial system while downstream processing requires upstream precursor documentation from suppliers capable of providing usable installation-level evidence or partial data suitable for default-based approaches depending on availability.
Smederevo-linked supply chains face combined carbon documentation and trade-access constraints
The Smederevo site remains central because HBIS Group Serbia is identified as dominant primary producer supplying processors fabricators construction-product manufacturers machinery suppliers and exporters serving EU customers established over time through existing supply chains close geographic proximity to Central European industrial markets and demand reflected in increased import volumes during 2025.
The source states that from 2026 access depends on additional entry documentation beyond price customs treatment including carbon files aligned with definitive-period requirements for verified embedded emissions where actual values are used or default values where supplier information cannot support actual calculations.