The US has no federal carbon price to offset against — so American steel, aluminium, cement, fertiliser, and hydrogen exporters are largely paying the EU’s carbon border tax at close to full sticker price, even as their cleaner production could work in their favor.

In this article:

• Why the US has almost nothing to offer the EU as a “carbon price already paid” credit
• Whether California or RGGI change the math (short answer: barely)
• How the competing Foreign Pollution Fee Act differs from CBAM in logic, not just name
• The actual dollar scale of US CBAM exposure, with figures
• Why cleaner US production could make CBAM a competitive edge, not just a cost
• The live US-EU trade friction over CBAM, and what to do about all of it

If you run or supply a US steel mill, aluminium smelter, cement plant, fertiliser producer, or hydrogen project that ships into Europe — or sit somewhere in the supply chain behind one — CBAM is no longer a future problem. It has been live since January 1, 2026, and it treats American exporters differently than it treats exporters from countries with their own carbon price. Here’s what that difference means for your business.

A 30-second refresher on how CBAM works

CBAM makes importers of steel, aluminium, cement, fertiliser, hydrogen, and electricity into the EU buy certificates covering the carbon emitted in making those goods — the same cost an EU factory already pays under the EU’s own carbon market. The obligation is phasing in gradually: importers covered just 2.5% of embedded emissions in 2026, rising to 10% by 2028 and 100% by 2034. Critically, the formula lets an importer subtract any carbon price “effectively paid” in the country where the good was made, so nobody gets charged twice for the same emissions.

That last part is where US exporters run into a structural problem.

Does the US have a carbon border tax of its own? No — and that’s the issue

There is no federal carbon price or cap-and-trade system in the United States as of 2026. A Niskanen Center analysis of where US carbon policy stands this year notes that carbon management policy is “no longer advancing through climate-focused priorities at the executive level,” and no nationwide price on carbon exists. Two carbon-linked bills are pending in Congress, but neither is a domestic carbon price — both are border tariffs aimed the other direction, which we’ll get to.

That absence matters because CBAM’s credit mechanism is built around domestic carbon prices, not import tariffs. If your home country doesn’t charge you for carbon, the EU has nothing to net against your CBAM bill.

What about state programs — California, RGGI?

Thirteen US states, representing over 30% of the population and more than 36% of GDP, do have some form of carbon pricing, according to the Center for Climate and Energy Solutions (C2ES). But the coverage doesn’t line up well with CBAM’s industrial sectors:

RGGI, the program covering the most states, only prices power-sector emissions — it doesn’t touch steel, aluminium, cement, or fertiliser manufacturing. California and Washington are broader, but apply only to production physically located in those two states, with partial coverage of heavy industry even there.

On top of that, the European Commission’s implementing rules for which foreign carbon prices qualify for a CBAM credit were still being finalized as of mid-2026, per CO2 IQ’s review of third-country carbon prices — and the sources reviewed do not list the US, California, or RGGI among the roughly 18 non-EU carbon-pricing systems currently flagged as CBAM-relevant. Even a California aluminium smelter paying the state price faces real uncertainty about whether — and how much — credit it would receive.

Put simply: for the large majority of US exporters in CBAM-covered sectors, there is no qualifying domestic carbon cost to point to at all.

Does a US exporter get a CBAM credit for the carbon costs it already pays at home?

The Foreign Pollution Fee Act: a very different tool, aimed the other way

Congress isn’t ignoring carbon and trade — it’s building something structurally different from CBAM. The Foreign Pollution Fee Act (FPFA), reintroduced in April 2025 as S. 1325 by Senators Bill Cassidy (R-LA) and Lindsey Graham (R-SC), would tariff imports based on how carbon-intensive they are relative to US-made equivalents. It covers an almost identical product list to CBAM — iron, steel, aluminium, cement, fertiliser, hydrogen, and solar components — with an original baseline tariff around 15%, adjusted by carbon intensity. As of 2026 it’s still pending before the Senate Finance Committee, wasn’t included in the “One Big Beautiful Bill Act,” and hasn’t had a floor vote. A rival proposal, Senator Sheldon Whitehouse’s Clean Competition Act, is also pending.

The important distinction isn’t the status — it’s the logic. CBAM is paired with a domestic carbon price: EU producers pay too, and importers pay an equivalent at the border. The FPFA is a border tariff without an accompanying domestic US carbon price — it charges foreign goods entering the US by carbon intensity but doesn’t tax US producers’ own emissions. American steelmakers want exactly that asymmetry: in Senate testimony, AISI’s Kevin Dempsey argued any US carbon-import duty should “apply equally to all steel imports, regardless of their origin,” while industry voices have separately opposed a domestic production levy like the EU’s model.

The upshot: even if the FPFA becomes law, it would not reduce what US exporters owe under CBAM. It’s a US-side import tool aimed largely at China and India, not an EU-recognized carbon price that earns a CBAM credit.

How big is US CBAM exposure, really?

Some good news first: the US isn’t one of the countries most exposed to CBAM. One trade-data analysis describes the US as “a comparatively minor supplier of raw steel and aluminum to the EU,” not among the most exposed economies — that list is dominated by Turkey, China, India, and Russia. In CBAM’s first week under the definitive regime (January 2026), the leading source countries for CBAM-covered declarations into the EU were Turkey, China, India, Canada, Taiwan, and Vietnam; the US didn’t crack the top ranks.

But “not the biggest” doesn’t mean “not real.” A Niskanen Center analysis projects US exporters across the five priced CBAM sectors will pay approximately:

Those figures will keep climbing as the certificate phase-in accelerates — the obligation jumps from 22.5% of embedded emissions in 2029 to 48.5% in 2030, the steepest single-year increase in the whole schedule, before reaching 100% in 2034. Companies treating today’s modest bill as a preview of what’s coming will underestimate the 2030s significantly.

Niskanen frames this pointedly, arguing a federal carbon price would “bring the producer’s CBAM certificate obligation close to zero” and let Washington, not Brussels, capture that revenue. As things stand, the US is effectively letting the EU collect money a domestic carbon policy could have captured first.

The counterintuitive part: CBAM could actually help US exporters

Because CBAM charges are based on actual embedded emissions, not a flat tariff, the lack of a domestic carbon price doesn’t automatically mean American exporters are worse off than everyone else. It means no credit — but if production is genuinely cleaner, the emissions bill to begin with is smaller.

US steel and aluminium production skews toward lower-carbon methods — more electric-arc-furnace steelmaking, natural gas rather than coal-fired blast furnaces. One opinion analysis makes the comparison concrete: Chinese steel is roughly 3x more carbon-intensive than US steel, Indian steel is 50%+ more carbon-intensive, and South African aluminium runs roughly 6x more carbon-intensive per tonne than US aluminium. Since CBAM certificates scale with embedded emissions, a cleaner US producer pays proportionally less than a dirtier competitor selling the same tonnage into the EU — no domestic-price offset needed for that advantage.

Both dynamics are real, and worth holding at once: no credit for carbon costs paid at home, but potentially a smaller emissions bill to apply the certificate price against. For a genuinely low-carbon US producer, CBAM can function less like a tax and more like a tilted playing field in their favor.

The trade tension isn’t settled — it’s live

CBAM sits inside a broader, unresolved US-EU trade relationship. The EU-US Framework Agreement on Reciprocal, Fair, and Balanced Trade took effect July 1, 2026, and includes language committing the EU to “work to provide additional flexibilities” on CBAM implementation, particularly for small and medium-sized businesses. According to a Columbia University energy-policy analysis, this commitment is non-binding and vague — it doesn’t exempt US exporters from CBAM, and is best understood as diplomatic signaling rather than substance.

The friction hasn’t gone away since. On August 12, 2026, US Ambassador to the EU Andrew Puzder wrote in the Financial Times that CBAM amounts to a “striking double standard,” accusing Brussels of criticizing US trade barriers while erecting its own. The European Commission rejected the characterization the next day, stating CBAM “is non-discriminatory, WTO-compatible, and applies equally to all third countries based on verified embedded emissions” — a climate tool, not a tariff, in the Commission’s framing.

This runs alongside the US’s own Section 232 tariffs on steel, aluminium, and copper (up to 50% on primary metals), which have already cut EU steel exports to the US by roughly 34% since imposition, per S&P Global data. Both mechanisms hit the same trade lanes from opposite directions, and neither dispute looks close to resolved.

What US exporters should do now

Waiting for Washington to negotiate this away isn’t a strategy — the trajectory points toward more friction, not less, and the cost curve steepens regardless of politics. A few concrete steps:

• Get actual emissions data ready, not just default values. Declarants can fall back on conservative EU-wide defaults when a supplier won’t share verified data. If your production is genuinely cleaner than the sector average, verified data is usually what captures that advantage.
• Map exposure by product line and export volume, not just by company. It’s concentrated wherever you ship steel, aluminium, cement, fertiliser, or hydrogen into the EU.
• Model the 2029–2030 jump now. The obligation nearly doubles in that single year, and budgeting off 2026–2028 numbers alone will understate what’s coming.
• Don’t assume a state carbon price will offset your CBAM bill without confirming current EU crediting rules first.
• Track the FPFA and Clean Competition Act, but don’t expect either to cut your CBAM obligation even if passed — they solve a different problem, aimed at imports into the US.

How Sprih Helps

The pattern in this post repeats across every country we’ve researched in this series: whether or not your home government has a carbon price, CBAM ultimately comes down to whether you can produce accurate, verifiable, supplier-level embedded-emissions data — fast, and on the EU’s terms. For US exporters without a domestic price to lean on, that data is the only lever left to control what you actually owe.

That’s the problem Sprih is built to solve. Our SustainSense platform indexes 120,000+ companies and 400,000+ sustainability reports as an AI-native intelligence layer for climate and compliance data, and we’re building CBAM-specific tooling to help importers and their US suppliers calculate, verify, and manage embedded-emissions figures instead of defaulting to conservative EU estimates. We work with enterprise clients across 21+ countries, including major US manufacturers and exporters navigating exactly this exposure.

Sprih is an AI-native sustainability intelligence company helping enterprises turn climate and compliance data into competitive advantage.