Thai CBAM Exposure: Steel, Aluminium, and the Textile Rotation
EU CBAM definitive phase from Jan 1 2026 hits Thai exports; Kasikorn Research estimate ~3.8% of Thai-EU exports (~THB 28B). Steel and aluminium take biggest hit; Thai production emissions can be 17x higher than EU per tonne. CBAM-covered exports already declined 14% post-2020 / 38% cumulative post-2023. Late-2025 EC proposal extends CBAM to downstream products by 2028.
Key takeaways
- 1
EU CBAM definitive paid-compliance phase began 1 January 2026 per the European Commission. CBAM scope: cement, iron and steel, aluminium, fertilisers, electricity, hydrogen.
- 2
Kasikorn Research Centre estimate: CBAM impact approximately of Thai exports to EU, or roughly per year.
- 3
Largest hit: Thai steel and aluminium. Cement and fertiliser impact limited because Thailand exports relatively small volumes of those to the EU.
- 4
Per-tonne steel CBAM cost: 1,300-1,500 baht ( of product value); annual steel CBAM cost ~ for Thai steel exporters to the EU.
- 5
Embedded-emissions intensity: Thai production emissions per tonne can be up to 17x higher than European benchmarks where producers rely on coal-based processes.
- 6
Cumulative CBAM-covered Thai-EU export decline already : - post 2020 announcement, - further post 2023 implementation per World Bank methodology. Late-2025 EC proposal extends CBAM to downstream steel and aluminium-using products from 1 January 2028.
Questions this report answers
What's the EU CBAM and when does it bite Thailand? Per the European Commission: CBAM definitive paid-compliance phase began 1 January 2026 after a 2-year transitional reporting period (October 2023 to end-2025). CBAM scope: cement, iron and steel, aluminium, fertilisers, electricity, hydrogen β the most carbon-intensive trade categories. EU importers must purchase CBAM certificates equivalent to embedded emissions in imported goods, priced via the EU ETS auction. The structural intent: prevent carbon leakage and equalise carbon-pricing burden between EU domestic producers (under EU ETS) and foreign exporters into the EU market.[, , ]
How big is Thailand's exposure? Per Kasikorn Research Centre coverage in Nation Thailand: initial CBAM impact approximately of Thai exports to EU, or roughly per year. Largest hit on Thai steel and aluminium; cement and fertiliser impact limited because export volumes to EU are small. Per-tonne steel CBAM cost: 1,300-1,500 baht ( of product value); annual steel CBAM cost approximately for Thai steel exporters per Kasikorn analysis. Embedded-emissions intensity matters β Thai production emissions per tonne can be up to 17x higher than European benchmarks where producers rely on coal-based processes.[]
What's the historical trade-flow evidence? Per the World Bank's CBAM developing-country exposure methodology: Thai CBAM-covered exports to the EU have already declined relative to other Thai-EU exports following the 2020 CBAM announcement, and a further after 2023 transitional-phase implementation began. Cumulative pre-paid-phase decline is approximately . The structural-trade-impact mechanism: even without paid-compliance cost, EU importers shifted to lower-carbon-intensity suppliers in anticipation. Once the paid phase started 1 January 2026, the impact accelerates further per Nation Thailand.[, ]
What's the late-2025 European Commission downstream-extension proposal? Per Nation Thailand and Senken / Greenly CBAM analyses: the EC has proposed extending CBAM to downstream products that rely heavily on steel and aluminium β target start date 1 January 2028. The structural threat to Thailand: textile, electronics, and automotive-components sectors that embed steel and aluminium inputs would face CBAM-equivalent compliance costs even if direct steel and aluminium exports decline. The structural mitigation playbook: factory- and product-level MRV systems, renewable-electricity PPAs and onsite solar, and supply-chain traceability per Bangkok Post and Krungsri Research.[, , , , ]
Executive summary
EU CBAM definitive paid-compliance phase began 1 January 2026, marking the structural inflection for Thai exporter carbon-cost economics. Kasikorn Research Centre estimates initial impact approximately of Thai exports to EU (~ per year). The largest hit falls on Thai steel and aluminium β Thai production emissions per tonne can be up to 17x higher than European benchmarks where producers rely on coal-based processes. Per-tonne steel CBAM cost is 1,300-1,500 baht ( of product value), implying annual steel CBAM costs of for Thai steel exporters per Kasikorn analysis.[, ]
The historical trade-flow evidence shows the structural-impact mechanism predates the paid phase. Per World Bank methodology: Thai CBAM-covered exports to EU declined post 2020 announcement and a further post 2023 implementation β cumulative ~ decline before paid-compliance even started. EU importers shifted to lower-carbon-intensity suppliers in anticipation. Once the paid phase started 1 January 2026, this acceleration continues. Cement and fertiliser impact is limited because Thailand exports relatively small volumes of those products to the EU.[, ]
The forward threat is the late-2025 EC proposal to extend CBAM to downstream products that rely heavily on steel and aluminium β target start date 1 January 2028. This would expand CBAM scope from raw-material exports to finished goods (textile, electronics, automotive components) that embed steel and aluminium inputs. The mitigation playbook per Bangkok Post and Krungsri Research: factory- and product-level MRV systems, renewable-electricity PPAs and onsite solar to lower embedded-emissions intensity, supply-chain traceability and audit. Sector rotation away from CBAM-exposed EU exports toward ASEAN, China, and US markets is the structural-portfolio response, but with limits β many downstream sectors structurally rely on EU export markets.[, , ]
CBAM impact at a glance
CBAM definitive phase start
Value
1 January 2026
Notes
Per European Commission CBAM official page.
CBAM scope (initial)
Value
6 sectors
Notes
Cement, iron and steel, aluminium, fertilisers, electricity, hydrogen.
Initial Thai impact
Value
~3.8% of Thai-EU exports
Notes
approximately $811.6M per year per Kasikorn Research Centre.
Steel CBAM cost (per tonne)
Value
1,300-1,500 baht
Notes
1.5-1.7% of steel product value.
Annual steel CBAM cost
Value
$4.84-193M
Notes
For Thai steel exporters to EU.
Thai vs EU emissions intensity
Value
Up to 17x higher
Notes
Where Thai producers rely on coal-based processes.
Cumulative pre-paid-phase decline
Downstream extension proposal
Value
Target 1 Jan 2028
Notes
Late-2025 EC proposal; covers steel and aluminium-using products.
| Metric | Value | Notes |
|---|---|---|
| CBAM definitive phase start | 1 January 2026 | Per European Commission CBAM official page. |
| CBAM scope (initial) | 6 sectors | Cement, iron and steel, aluminium, fertilisers, electricity, hydrogen. |
| Initial Thai impact | ~3.8% of Thai-EU exports | approximately $811.6M per year per Kasikorn Research Centre. |
| Steel CBAM cost (per tonne) | 1,300-1,500 baht | 1.5-1.7% of steel product value. |
| Annual steel CBAM cost | $4.84-193M | For Thai steel exporters to EU. |
| Thai vs EU emissions intensity | Up to 17x higher | Where Thai producers rely on coal-based processes. |
| Cumulative pre-paid-phase decline | approximately 38% | -14% post 2020, -24% post 2023 per World Bank methodology. |
| Downstream extension proposal | Target 1 Jan 2028 | Late-2025 EC proposal; covers steel and aluminium-using products. |
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