Manufacturing

The platform decision is the most consequential architecture choice a company makes, and the one most often made as a procurement exercise rather than a strategic one.

CBAM entered its definitive phase on January 1, 2026. For every tonne of steel, aluminium, cement, or fertilizer exported to the EU, your embedded carbon now determines your import cost. The manufacturer who cannot document its emissions is priced at the worst 10 percent of EU producers. The one who can is priced at its actual footprint. That gap is now your competitive position.

On January 1, 2026, CBAM moved from reporting to financial obligation. Every tonne of embedded carbon in your EU imports now carries a direct cost linked to the EU ETS at EUR 85/t. Suppliers who cannot document their emissions are priced at the worst 10% of EU producers. The ones who can are building a structural margin advantage. This is a COGS decision, not a compliance exercise.

Service contracts generate +25% higher margins than equipment sales. Near-zero churn. Rolls-Royce generates 69% of its revenue from long-term service agreements. The question is not whether servitization works. It is whether you have the model to price it profitably.

The EU Carbon Border Adjustment Mechanism is no longer a future scenario. Full implementation is in force in 2026. The manufacturers whose supply chains cross the EU border with unpriced carbon embedded in their inputs are accumulating a cost liability that is now due.