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CBAM Takes Effect: Thailand's Steel Industry to Bear the Brunt

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2026-01-12
     With CBAM effective on January 1, 2026, Thai analysts predict that Thailand's iron and steel sector will face the heaviest impact. K-Research estimates the mechanism will affect 3.8% of Thailand's exports to the EU, equivalent to 28 billion bahts. Iron and steel, along with aluminum, will be hit first; in 2024, Thailand exported US$95.1 million worth of iron and steel to the EU and US$56.7 million in aluminum. Cement and fertilizer exports were negligible, while electricity and hydrogen had no sales to the EU.
 
     Thai steelmakers are already under pressure from cheap Chinese imports and the US decision to raise steel and aluminum tariffs from 25% to 50%. CBAM will further erode competitiveness. Analysts warn that while initial financial burdens are limited, failure to adjust quickly could undermine Thailand's manufacturing edge.
 
     To support exporters, the government is advancing the climate change bill approved by the cabinet on December 2, 2025, demonstrating Thailand's commitment to global decarbonization. The Federation of Thai Industries chairman stated: "This bill will bolster industry and exports, protect Thai products in international markets, and prevent lagging behind global climate standards." He emphasized that if Thailand fails to keep pace with CBAM and similar regulations, it risks declining export competitiveness, slower economic growth, and widening industry inequality.
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