CBAM Compliance for Saudi Exporters: What’s Required in 2026

The EU’s Carbon Border Adjustment Mechanism (CBAM) — Regulation (EU) 2023/956 — entered its definitive enforcement period on 1 January 2026. For Saudi manufacturers and exporters of CBAM-covered goods, this is no longer a future concern: it is an active compliance requirement with a fixed reporting timeline and real financial consequences for non-compliance.

1 Jan
2026
CBAM definitive enforcement period began — EU importers must now purchase certificates
2–3×
EU default values vs. real production emissions for well-run facilities
>EUR 1M
potential annual certificate cost gap per mid-size steel exporter relying on default values
What is CBAM

The Carbon Price at the EU Border

CBAM requires importers of certain carbon-intensive goods into the EU to report the embedded greenhouse gas emissions of those goods, and — from the definitive period onward — to purchase CBAM certificates corresponding to the carbon price that would have been paid had the goods been produced under EU carbon pricing rules. It is, in effect, a border carbon price levied on imports from jurisdictions without equivalent carbon pricing.

Scope — covered goods

Which Saudi Exports Fall Under CBAM?

CBAM currently applies to six goods categories. Saudi exporters in steel, cement, aluminium, and fertiliser production with significant EU trade exposure fall directly within scope.

Iron & Steel
Flat and long steel products, pipes and tubes — some of the most CBAM-exposed Saudi export categories given EU trade volumes.
High exposure
Aluminium
Primary aluminium, aluminium products including semi-finished goods. Saudi producers benefit from low-cost energy but must still demonstrate actual embedded emissions.
High exposure
Cement & Fertilisers
Cement clinker, cement, and nitrogenous fertilisers. Fertiliser producers face particular complexity given process emissions from ammonia production.
Moderate–high
Hydrogen
Green, blue, and grey hydrogen — methodology for embedded emissions tracks production pathway. Saudi Vision 2030 hydrogen ambitions make this strategically significant.
Emerging scope
Electricity
Cross-border electricity imports. Currently limited in Saudi-EU direct trade context but relevant to future energy export scenarios.
Emerging scope
CN Code Check
CBAM scope is defined precisely by Combined Nomenclature (CN) codes. Exporters must verify each product code against Annex I of Regulation (EU) 2023/956.
Action required
“The cost of not verifying emissions is usually far higher than the cost of getting a proper GHG inventory and third-party verification done.”
CBAM Default Value Analysis · EU Commission · 2025
The default value penalty

What Happens Without Verified Emissions Data?

Critical risk

Default Values Are Typically 2–3× Higher Than Real Emissions

If a Saudi producer does not supply verified actual embedded emissions data, the EU importer must use default values set by the European Commission. These defaults are typically two to three times higher than real production emissions for well-run facilities.

For a mid-sized steel exporter producing roughly 10,000 tonnes annually, the gap between default and verified actual values can exceed EUR 1 million per year in CBAM certificate costs — based on industry estimates of default-value premiums. In practice, this means the cost of not verifying emissions is usually far higher than the cost of getting a proper GHG inventory and third-party verification done. Exporters relying on default-value treatment are also structurally less competitive than suppliers with verified data, as EU buyers absorb the higher certificate cost and negotiate pricing accordingly.

Verification requirements

What Does CBAM-Defensible Verification Actually Require?

Facility-level GHG inventory

Covering direct and relevant indirect emissions, aligned with the CBAM implementing regulation methodology — which draws on IPCC Tier 1–3 approaches and EU ETS-equivalent boundaries. This is the foundation everything else rests on.

Product-level embedded carbon calculation

Cradle-to-gate for most CBAM goods, following the specific calculation rules set out in EU Implementing Regulation 2023/1773. General-purpose carbon accounting is not automatically CBAM-compliant — the methodology is specific and must be applied correctly at the product boundary level.

Third-party verification by an accredited body

Verification must be conducted by a body accredited to ISO 17029 and ISO 14065, confirming that the emissions data is accurate and the methodology was correctly applied. Note: ISO 14064 certification alone does not satisfy CBAM on its own — but an existing ISO 14064-aligned inventory puts you in a substantially stronger starting position.

Documentation retention for audit

CBAM declarations and supporting evidence must be retained for audit purposes. EU importers are required to reference verifiable records in their quarterly and annual declarations — which means Saudi producers must maintain records in a format that supports the importer’s filing obligations.

Key compliance dates

Dates Saudi Exporters Must Track

Date
Obligation
1 January 2026
Definitive CBAM period began. EU importers must now purchase CBAM certificates — not just report. Exporters without verified data immediately disadvantaged on certificate cost.
30 September 2027
First annual CBAM declaration due, covering 2026 import volumes. Missing this does not remove the obligation — it shifts the cost onto EU buyers via default values, reducing Saudi exporter competitiveness.
Now → Q2 2027
Verification capacity window. Third-party verifiers accredited to ISO 17029 / ISO 14065 are limited in the region; lead times are growing as the September 2027 deadline approaches. Engaging early is a practical necessity.
ISO 14064 and ISO 14067 do not automatically satisfy CBAM. CBAM has its own specific methodology and reporting format under EU Implementing Regulation 2023/1773. However, a company that already maintains an ISO 14064-aligned GHG inventory is in a substantially stronger position to produce a CBAM-compliant declaration quickly, since the underlying data collection, boundary-setting, and quality-assurance processes overlap significantly.
Action plan

What Saudi Exporters Should Do Now

Identify CBAM exposure

Confirm which CN codes in your export mix fall under the six covered categories. This is the prerequisite for all subsequent steps — scope before methodology.

Build or update the facility GHG inventory

Establish actual, defensible emissions data at the facility level — aligned with CBAM implementing regulation methodology. Relying on default values is not a cost-neutral position; it is an active competitive disadvantage.

Engage third-party verification early

Verification capacity in the region is limited and lead times are growing. With the September 2027 declaration deadline approaching, early engagement is a practical necessity, not a nice-to-have.

Align internal reporting with EU methodology

General-purpose sustainability reporting is not automatically CBAM-compliant. The calculation rules under Regulation 2023/1773 are specific — product-level boundaries, IPCC tier alignment, and embedded emissions scope must all be correctly applied.

VerdeVista services

How VerdeVista Supports CBAM Compliance

GHG Inventory

Facility-Level GHG Inventory Development

ISO 14064-1 aligned GHG inventories, structured for CBAM compliance from the outset — covering Scopes 1 and 2 with relevant Scope 3 embedded emissions at the product boundary.

Verification

ISO 14064 Verification Readiness

Pre-verification gap analysis and documentation preparation, ensuring your inventory is ready for third-party verification by an ISO 17029 / ISO 14065 accredited body.

CBAM Advisory

EU Methodology Alignment

Translating ISO-aligned GHG work into CBAM-specific product-level embedded carbon calculations under EU Implementing Regulation 2023/1773 — closing the gap between general sustainability reporting and regulatory compliance.

Reporting

Declaration Support & Documentation

Structuring the underlying data and supporting records to enable EU importers to file accurate quarterly and annual CBAM declarations — and to withstand audit scrutiny from EU authorities.

Request a CBAM compliance consultation

VerdeVista supports Saudi manufacturers and exporters with GHG inventory development, ISO 14064 verification readiness, and CBAM compliance advisory — drawing on ISO 14064-1/2/3, ISO 14067, and IPCC Tier 1–3 methodologies aligned with EU CBAM requirements.

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