Board memo: Gulf steel CBAM exposure and this quarter's export decision

The Decision

Whether to commit capital this quarter to installation-specific verified emissions data and low-carbon steel supply for EU-bound volumes, or absorb CBAM costs under EU default values and compete on price alone R-02R-06W-01.

Three Facts That Matter

• Definitive regime, live now. CBAM has applied under its definitive regime since 1 January 2026, covering iron and steel imports into the EU W-01.
• The cost is no longer theoretical. At an EU ETS price of $90/tonne against 1.8 tonnes CO₂ per tonne of steel, the record shows +$50–180/ton added to traditional steel costs R-07.
• Defaults are the expensive option. The record's calculator shows a net CBAM obligation of 7,020 tonnes CO₂ on a 10,000-tonne consignment — 35% of embedded emissions — for exporters operating on EU default values rather than installation-specific data R-06R-02.

The Record, Annotated

Khurram Badar's record on carbon border costs begins on 1 September 2025, when he published that six sectors — cement, steel, aluminium among them — were selected for being carbon-intensive, trade-exposed, and at risk of carbon leakage R-05. (still holds — W-01 confirms steel is within the definitive regime from 1 Jan 2026)

By 8 January 2026 he had priced the exposure directly: an EU ETS carbon price of $90/tonne against 1.8 tonnes CO₂ per tonne of steel adds "+$50-180/ton" to traditional steel costs R-07. (no live source tests this)

On 10 January 2026 he published a steel import cost calculator showing a net CBAM obligation of 7,020 tonnes CO₂ on a 10,000-tonne consignment — "35% of embedded emissions" R-06. (no live source tests this)

The same day he set out exporter options: installation-specific emissions data for "lower customer costs, competitive advantage", or EU default values R-02. (still holds — W-01 confirms the definitive regime where default values apply)

What I'd Want Answered Before Voting

1. What is our verified, installation-specific CO₂ intensity per tonne of steel — and how far is it from the 1.8 tonnes figure in the record R-07?
2. If we stay on EU default values, what is the modelled quarterly cost on our actual EU consignment volumes R-06?
3. What would it cost to produce auditable installation-level emissions data before the next compliance window R-02?
4. Can we pass any portion of the CBAM cost through to EU customers this quarter, or does the market price us against default-value competitors R-06?
5. Is there a regional demand story — GCC growth projected at 3.2% in 2025 and 4.5% in 2026 — that lets us defer EU exposure without losing volume W-02?

The route to the actual view is a 1:1 with Khurram on WhatsApp.

Debate it with Khurram, 1:1 on WhatsApp →