The financial impact of the Carbon Border Adjustment Mechanism (CBAM) differs between cement and fertiliser producers, reflecting contrasting transport economics, production costs and customer purchasing patterns. Cement markets are strongly influenced by local supply conditions and delivery costs, while nitrogen fertiliser profitability is closely linked to natural gas prices, international trade and seasonal demand.
Although both sectors include products covered by CBAM, the applicable carbon cost depends on customs classification, covered emissions, the relevant benchmark adjustment and eligible carbon-price deductions. Applying a uniform surcharge across all cementitious products or fertiliser formulations would fail to account for differences in composition and manufacturing processes.
For producers and investors, the central commercial question is how much of the carbon-adjusted price can be recovered from customers without reducing sales volumes. The answer depends on the cost structure and market conditions of each sector.
Heidelberg Materials reports lower clinker incorporation factor
Heidelberg Materials reported a clinker incorporation factor of 67.8% in the first half of 2026, down from 68.5% a year earlier. Despite the reduction, specific net emissions remained at 510 kg CO₂ per tonne of cementitious material, according to the company’s first-half 2026 presentation.
The group is pursuing measures involving lower clinker content and carbon capture technologies alongside its exposure to carbon policy. Its reported emissions indicator provides information about the broader business, but should not automatically be used as the CBAM emissions factor for an individual imported product.
Heidelberg Materials recorded first-half revenue of approximately €10.58 billion and operating EBITDA of €1.90 billion. Its financial performance reflects an international building-materials portfolio that includes aggregates and ready-mixed concrete, as well as cement, with earnings also influenced by regional construction demand.
Consequently, CBAM exposure needs to be assessed at the relevant product and trade level rather than inferred from the group’s consolidated revenue or operating performance.
Transport costs and construction demand shape cement pricing
Cement’s relatively low value compared with its transport costs makes delivery distance, terminal access and handling important determinants of competitiveness. If carbon costs increase the delivered price of competing imports, domestic producers may gain room to improve selling prices or increase capacity utilisation.
The extent of that benefit depends on demand conditions. In a weak construction market, customers may respond to higher prices by reducing purchases or switching to alternative materials rather than accepting the full carbon-related increase.
An illustrative €8 per tonne improvement in margin across 3 million tonnes of cement sales would generate €24 million before additional costs. The actual return would differ if achieving the improvement required investment in a new terminal, kiln expenditure or long-term commitments for carbon transport.
Infrastructure requirements can also affect the timing of financial returns from emissions-reduction projects. A reduction in emissions does not necessarily translate immediately into additional cash flow where supporting infrastructure and capital expenditure remain necessary.
Yara links fertiliser decarbonisation to ammonia sourcing and carbon capture
Fertiliser producers face a different set of commercial variables. Natural gas prices influence ammonia production costs, while the effect of ammonia procurement on finished-product economics depends on each company’s assets and product configuration. The ability to substitute imported ammonia for internally produced material therefore varies between producers.
Yara’s second-quarter 2026 presentation stated that the company’s emissions footprint was below the average for CBAM importers and identified several ways to reduce carbon costs. These included sourcing low-carbon ammonia and developing the Sluiskil carbon capture project, which targeted the capture of up to 800,000 tonnes of CO₂ from mid-2026.
The 800,000-tonne figure represents the project’s stated capture target, not a verified volume of emissions already captured. The distinction is relevant when assessing the project’s contribution to emissions performance and the associated commercial benefits.
Yara also reported that higher margins more than offset lower volumes during the quarter. Volatile nitrogen prices delayed some off-season purchasing, highlighting the influence of seasonal buying patterns on demand alongside changes in European carbon policy.
Fertiliser cost recovery depends on farmers’ purchasing decisions
An importer facing a higher carbon-adjusted fertiliser cost may attempt to recover the increase through distributors and farmers. However, the extent of the pass-through depends on buyers’ ability and willingness to pay.
When expectations for crop revenues are weak, farmers may postpone purchases or change their fertiliser application plans. Producers then face a choice between holding inventory and reducing prices to maintain sales, with consequences for working capital and margins.
These dynamics make the timing of purchases particularly important. Even where a producer can recover some of the additional carbon cost, delayed orders can affect sales volumes and inventory requirements during the relevant purchasing season.
The exposure differs from cement, where the economics of transport and access to local construction markets are central to pricing. In fertilisers, energy costs, ammonia sourcing, international price movements and the agricultural purchasing cycle all influence how much of the carbon-related expense can be passed through.
Southeast European exporters face pricing and market-diversion risks
For exporters in Southeast Europe, competitive gas costs or favourable local logistics can help preserve access to European markets. However, the emissions evidence and precursor data supporting a product’s CBAM calculation also affect the offer presented to EU buyers.
If European sales become less competitive, exporters may redirect volumes to other destinations. Such changes in trade flows can affect prices in alternative markets, although the outcome depends on the volumes involved and the conditions in those destinations.
For cement producers, the commercial case depends on local delivered-cost competitiveness, construction demand and the investment required to support emissions reductions. For fertiliser producers, profitability depends more directly on competitive energy and ammonia supply, as well as access to buyers during seasonal demand periods.
In both sectors, the financial benefit from carbon-adjusted pricing ultimately depends on the portion of the additional revenue retained after production costs and the customer’s response to higher prices are taken into account.
