CBAM (Carbon Border Adjustment Mechanism)—the EU regulation aimed at taxing CO2 emissions on products imported from non-EU countries—currently poses a threat to the hardware distribution chain due to a lingering lack of clarity and widespread uncertainty. We have attempted to gain a deeper understanding thanks to the invaluable support of Corrado Savio, CBAM consultant for Machieraldo (a wholesaler within the Assofermet Technical Committee), who answered our questions.

Faced with yet another European acronym, many operators in the hardware sector initially shrugged their shoulders, hoping it was just another bureaucratic phase destined to fizzle out. But CBAM (Carbon Border Adjustment Mechanism) is no passing cloud: it is a storm threatening to break over the entire hardware supply chain.

The mechanism, which aims to tax the CO2 emissions of products imported from non-EU countries, could turn into an unsustainable cost for Italian wholesalers and all companies that import, even in minimal quantities. To clarify the CBAM and understand how to navigate it, we consulted Corrado Savio, CBAM consultant for Machieraldo (a wholesaler and member of the Assofermet Technical Committee)—the association that, more than any other, is fighting in Brussels to protect Italian distribution.

Buyer Point: Corrado, let’s start with the day-to-day. Why should a hardware wholesaler be concerned about CBAM today?

Corrado Savio: Because it is a true “Sword of Damocles.” Until yesterday, CBAM was a topic for raw steel producers; today, it is crashing into the warehouses of those selling screws, bolts, aluminum items, and more. Assofermet was the first to sound the alarm: initially, wholesalers didn’t even know what it was. Yet, if you import directly from China, India, Turkey, or any other non-EU country, you are now the one responsible. It’s not just bureaucracy: from 2027, it will turn into an actual tax that will change price lists.

Buyer Point: Many small importers fear being crushed. Is there a tolerance threshold?

Corrado Savio: Yes, and it’s a result we achieved specifically thanks to Assofermet’s pressure at the European level. We managed to have a minimum threshold of 50 tons per year included. If you stay below this limit, you are exempt from both the declaration and the payment. But be careful: a well-structured wholesaler exceeds this figure with just a few containers. For the “big players,” this threshold is a parachute that’s simply too small.

Buyer Point: There is a strange confusion regarding the products. Why is a threaded rod subject to the tax while wire mesh is not?

Corrado Savio: It’s one of the paradoxes of this regulation, which is based on customs codes. A threaded rod falls under CBAM, whereas fencing mesh does not, even though they are both made of iron. This creates incredible distortions: a European mesh manufacturer who buys wire (which is subject to CBAM) from abroad is penalized compared to someone importing the finished mesh from China. It is a system that, paradoxically, risks damaging both those who import and those who produce in Europe, and in the end, it primarily penalizes the final consumer.

Buyer Point: You mentioned a “5x cost” risk for those who are not compliant. What do you mean by that?

Corrado Savio: This is the heart of the economic problem. Europe says: “You must buy from certified suppliers.” If your non-EU supplier is transparent and certifies their CO2 emissions, you will pay a standard rate. But if the supplier is not certified—and today many don’t even know how to go about it, because the certifying bodies are not yet authorized—the importer will have to use EU “default values.” These values are punitive: in the worst-case scenario, you risk paying a tax five times higher than what you would pay with a compliant supplier.

Buyer Point: But can the European market absorb these price increases? Are there local alternatives available?

Corrado Savio: For many products, the answer is no. Take threaded rods, for example: Italian manufacturers practically no longer exist. CBAM was created with the idea of reducing global emissions, but it translates into an additional cost on goods that we are forced to import. At the end of the chain is the consumer: if costs increase by even just 1% or 2% at every stage, purchasing power drops and sales shrink. The sector certainly didn’t need this.

Buyer Point: In this climate of uncertainty, what is the role of an association like Assofermet?

Corrado Savio: To create critical mass, because on your own you get nowhere. Thanks to Assofermet, we have a seat at the European tables and have secured the exemption thresholds. But we need a “call to arms”: if more Italian wholesalers and distributors joined us, we would have even greater political weight. The more of us there are, the louder our voice reaches Brussels to demand extensions or corrections to a regulation that, as it stands, is a leap in the dark.

Buyer Point: What should we expect for 2027?

Corrado Savio: Uncertainty is the real enemy right now. We are hoping for an extension, given that final data is still missing and certifiers are not yet ready. At the moment, we are flying blind, but one thing is certain: those who do not start mapping their suppliers and customs volumes today will find themselves unprepared tomorrow, facing a very steep bill.