The EU's Carbon Border Adjustment Mechanism (CBAM) is expected to have a significant impact on Southeast Asia's carbon-intensive exports. (Photo: iStock)
Steelmakers across Southeast Asia are facing rising costs as the European Union’s Carbon Border Adjustment Mechanism (CBAM) entered its charging phase this year. In Malaysia, the Malaysia Steel Institute (MSI) estimates that CBAM-related compliance costs for the steel sector could reach 970.7 million ringgit (about USD 237.2 million) in 2026.
Previous research by RECCESSARY also found that Vietnam’s steel industry faces significantly higher exposure to CBAM than its regional peers, with its steel exports to the EU exceeding those of Thailand by more than 18 times.
Unlock the full article to explore three key takeaways:
- Malaysia's steel sector faces an estimated 970.7 million ringgit (about USD 237.2 million) in CBAM-related costs this year, projected to rise annually.
- Vietnam's steel exports to the EU reached EUR 2.2 billion, more than 18 times Thailand's roughly EUR 120 million.
- CBAM affects around 3.8% of Thailand's exports, equivalent to roughly 28 billion baht, with steel as the most affected sector.
