EU CBAM: USTR Comment Deadline and Exporter Impact

The EU CBAM has moved from policy planning to an immediate trade compliance concern for U.S. exporters. With USTR comments due November 9, 2026, affected companies have a limited opportunity to document costs, competitive disadvantages, data burdens, and potential market access consequences. ## What USTR Is Examining About EU CBAM The Office of the U.S. Trade Representative is seeking comments on how the European Union's Carbon Border Adjustment Mechanism affects U.S. producers, workers, exports, and broader trade with the EU. The comment period also covers potential expansion into downstream products that contain significant amounts of steel or aluminum. Comments are due November 9, 2026, through regulations.gov under docket USTR-2026-0661. USTR is expected to use industry submissions to support continued engagement with the EU and evaluate whether CBAM creates disadvantages for U.S. companies relative to EU producers or competitors in other countries. ### Current CBAM Coverage The EU began full implementation of CBAM on January 1, 2026. The mechanism currently covers specified products in the aluminum, cement, electricity, fertilizer, hydrogen, iron, and steel sectors. EU importers of covered goods generally must report embedded greenhouse gas emissions and acquire CBAM certificates. Certificate prices are tied to EU Emissions Trading System allowance auction prices. Although the legal obligation generally rests with the EU importer, U.S. producers often bear a substantial part of the operational burden because the importer needs emissions data from the manufacturer. ### Potential Downstream Expansion Proposed expansion to downstream steel-intensive and aluminum-intensive products could significantly broaden the commercial impact. Companies that do not currently view themselves as primary metals exporters could face new data requests, contractual requirements, and landed-cost considerations if their finished or intermediate products enter scope. The final product coverage, implementation timing, and technical requirements remain subject to the EU legislative process. Exporters should therefore avoid assuming that preliminary product lists are final. A more reliable approach is to identify exported products containing meaningful steel or aluminum content, monitor classification developments, and assess whether suppliers can support future emissions calculations. ## How U.S. Exporters Should Prepare Comments Effective USTR CBAM comments should provide specific commercial evidence rather than broad objections to carbon regulation. Trade directors and compliance managers should explain how the mechanism changes export costs, customer relationships, administrative workloads, or competitive positioning in the EU market. Quantitative information is especially useful when it can be disclosed. Examples may include affected export values, compliance staffing costs, third-party verification expenses, customer data requests, delayed transactions, lost sales, or pricing pressure. Companies should clearly distinguish documented impacts from anticipated risks associated with possible downstream expansion. ### Build an Affected-Product Inventory The first step is to map EU-bound products against current CBAM sectors. That review should connect product classifications, manufacturing locations, EU customers, sales volumes, and responsible internal business units. A second inventory should identify products that could be exposed if coverage expands downstream. Because the final scope is not settled, companies should not assign unsupported classifications or assume that every product containing steel or aluminum will be covered. Scenario planning can instead group products by material composition, manufacturing process, commercial importance, and likely data availability. ### Explain Competitive and Operational Effects Submissions should describe whether EU CBAM affects U.S. companies differently from EU manufacturers or third-country suppliers. Relevant issues may include differences in carbon-pricing systems, access to plant-level emissions data, supplier cooperation, verification costs, and the ability of smaller exporters to absorb new administrative expenses. Small and medium-sized exporters may face distinct challenges. They often have fewer compliance personnel, less influence over upstream suppliers, and limited systems for collecting production-level emissions information. A useful submission can explain how these limitations affect market access without overstating uncertain certificate costs or future product coverage. Companies may also propose practical changes, such as clearer calculation methodologies, workable default values, reasonable implementation periods, consistent verification expectations, and protections against duplicative reporting. Recommendations should be tied directly to documented business consequences. ## Separating CBAM Compliance From U.S. Customs Duties Companies that import merchandise into the United States and export goods to the EU may be managing two complex compliance tracks at once. Those tracks should remain separate in accounting systems, customs records, cost models, and internal controls. EU CBAM is an EU importer obligation connected to embedded emissions and the purchase of CBAM certificates. It is not a U.S. customs duty collected when merchandise enters the United States. As a result, CBAM certificate costs are not recoverable through U.S. duty drawback. ### Why CBAM Costs Are Not Drawback-Eligible Duties U.S. duty drawback generally permits the recovery of certain U.S. customs duties, taxes, and fees associated with imported merchandise when statutory and operational requirements are met. Eligibility depends on the relevant import, export, substitution, manufacturing, or destruction facts. A CBAM certificate purchase occurs under the EU carbon border framework. Even when the commercial cost is passed back to a U.S. exporter through pricing or contractual terms, that cost does not become a U.S. import duty. Companies should not place CBAM certificate expenses into drawback calculations or describe expected drawback recoveries as an offset to CBAM exposure. ### Maintain Separate Data and Cost Ledgers An integrated trade compliance program can still coordinate the two workstreams. Product classification, bill-of-material data, supplier records, and export transaction information may support both customs and carbon compliance, but the financial treatment and legal purpose of each dataset differ. A sound control structure should separately identify: - U.S. import entries and duties potentially relevant to drawback

• Exports or destructions used to support drawback claims
• EU-bound products potentially covered by CBAM
• Embedded-emissions data supplied to EU customers
• CBAM certificate costs charged by or allocated through EU counterparties
• Assumptions used for proposed downstream expansion scenarios This separation reduces the risk of overstating drawback eligibility, misallocating carbon costs, or presenting inconsistent data to customs authorities and EU customers. Customs brokers and trade compliance teams should also ensure that client communications do not treat CBAM as simply another tariff. ## Frequently Asked Questions ### What is the deadline for USTR CBAM comments? Comments are due November 9, 2026. Submissions should be filed through regulations.gov under docket USTR-2026-0661. Companies should allow time for legal, operational, financial, and executive review before filing, particularly when the submission includes confidential commercial information or detailed cost data. ### Which U.S. exporters are currently affected by EU CBAM? Current exposure generally centers on covered products in the aluminum, cement, electricity, fertilizer, hydrogen, iron, and steel sectors. Product-level scope depends on the applicable EU requirements and classification. Exporters should verify coverage carefully rather than relying only on general product descriptions or material content. ### Why do U.S. producers need emissions data if the EU importer is responsible? The EU importer generally needs information about embedded greenhouse gas emissions to satisfy its CBAM obligations. Because the relevant production information often originates with the manufacturer, U.S. exporters may need to collect facility, process, energy, and supplier data for their EU customers. ### Could downstream expansion affect finished goods? Yes. Proposed expansion could bring additional steel-intensive and aluminum-intensive downstream products into scope. The final coverage is not yet settled, so companies should monitor developments and conduct scenario planning without treating preliminary product lists as final legal requirements. ### Can CBAM certificate costs be recovered through U.S. duty drawback? No. CBAM certificate costs are not U.S. customs duties and are not recoverable through U.S. duty drawback. Companies should keep EU carbon compliance expenses separate from the import duties, taxes, and fees evaluated for drawback eligibility. ## How Stable Software Can Help ### Keep Duty Drawback Focused on Eligible U.S. Duties CBAM creates a new compliance and cost-management challenge, but it should not be mixed into U.S. drawback calculations. Customs brokers can use DrawbackAI to support duty drawback services for importer clients under the broker's own filer code. Stable Software provides DrawbackAI under a flat software license. Brokers can white-label the software for importer clients, maintain control of the filing relationship, and avoid a technology provider taking a percentage of the refund. As companies separate EU CBAM expenses from potentially recoverable U.S. duties, a dedicated drawback workflow can help keep the two compliance tracks appropriately distinct.

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