CBAM: What Malaysian Exporters to the EU Must Do

CBAM (the EU's Carbon Border Adjustment Mechanism) affects Malaysian exporters once their shipments to the EU exceed 50 tonnes a year in one of six covered product categories: iron and steel, aluminium, cement, fertilizers, hydrogen and electricity. From 1 January 2026, EU importers of those goods must start buying CBAM certificates priced to the embedded carbon in what they bring in, and they need verified emissions data from the exporter to calculate the bill. If your product and buyer are not in that list, or your annual shipped tonnage stays under 50 tonnes, CBAM does not currently apply to you.

In short

• CBAM's transitional period (reporting only, no cost) ran from October 2023 to December 2025.
• The definitive period starts 1 January 2026: EU importers must buy certificates matching your product's embedded carbon.
• Covered goods: iron and steel, aluminium, cement, fertilizers, hydrogen, electricity.
• A 50 tonnes/calendar-year de minimis exemption applies to cement, iron and steel, fertilizers and aluminium; electricity and hydrogen are not covered by this exemption.
• Your EU buyer will ask you for verified embedded-carbon data per shipment; you supply it, they carry the cost.

What CBAM actually is

CBAM puts a carbon price on certain goods entering the EU, matching the price EU-based producers already pay under the EU Emissions Trading System. Without it, an EU manufacturer paying for its carbon emissions would be undercut by an importer of the same product made somewhere with no carbon price at all. CBAM closes that gap by charging the importer, not the exporter, but the importer cannot calculate the charge without emissions data that only the exporter or producer can supply.

Does CBAM affect Malaysian companies?

Directly, only if you export one of the six covered goods to the EU above the tonnage threshold. Malaysia does export steel and aluminium products into European markets, so companies in those sectors should check their own shipment volumes and product codes (CN codes) against the CBAM annex rather than assume they are exempt. Indirectly, CBAM affects anyone further down a supply chain that feeds an EU-bound steel or aluminium product, since your buyer's buyer may start asking for the same carbon data one tier further back.

What data do Malaysian exporters need to provide?

Verified embedded-carbon data per product, essentially how many tonnes of CO2-equivalent were emitted to produce each tonne of your shipped goods, covering direct emissions from your own process and, for some product categories, indirect emissions from purchased electricity. Malaysia's grid emission factor (0.740 kg CO2e/kWh for Peninsular Malaysia, per Suruhanjaya Tenaga's 2022-2024 provisional figures) is a starting point for the electricity portion, but product-level verification typically requires a recognized methodology and, eventually, third-party verification rather than a single grid-average number applied uniformly.

When are the CBAM deadlines?

The transitional period, reporting quantities and emissions with no financial obligation, ran from 1 October 2023 to 31 December 2025. From 1 January 2026, the definitive period begins: EU importers must hold CBAM authorisation and start buying certificates against the emissions embedded in what they import. If you supply an EU importer in one of the covered categories, expect the request for verified carbon data to arrive now, not later, since your buyer's certificate cost depends on it from day one of the definitive period.

What this means in practice

If you are a Malaysian producer or exporter in a covered sector, the immediate task is not paying anything yourself, it is being able to answer your EU customer's data request accurately and on time. That starts with knowing your own product-level emissions, which in turn depends on having real energy and process data rather than an annual estimate. Sites already tracking energy consumption at the equipment or process level for EECA compliance or ISO 50001 have a head start, because embedded-carbon calculation draws on the same underlying activity data. For the electricity portion specifically, verified interval consumption data by process line is more defensible to an EU importer's auditor than a single annual site total.

If you export into CBAM-covered categories and need to get your energy and emissions data into a defensible shape, book a demo and we can talk through what your buyers are likely to ask for.