CBAM and Saudi Arabia

Fertilisers, aluminium, steel and cement are four of the six sectors under the Carbon Border Adjustment Mechanism (CBAM). Its definitive phase started on 1 January 2026. Saudi exporters of these goods therefore need an importer in the EU with authorised CBAM declarant status, above 50 tonnes a year.

The scope can grow. The European Commission has proposed adding 180 downstream products with a high steel and aluminium content from 1 January 2028 (European Commission, 2025).

The rules in the definitive phase

Six sectors fall within scope today: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Under Article 25 of the CBAM Regulation, customs authorities only allow an authorised CBAM declarant to import CBAM goods. The declarant buys its certificates from the competent authority in the EU Member State where it is established. An importer needs this status when it imports more than 50 tonnes of CBAM goods a year. For electricity and hydrogen, the status is needed from the first unit.

An exporter from outside the EU has two options. Its own EU company, such as a Dutch BV, applies for the status itself. Or an indirect customs representative with authorised CBAM declarant status files the declarations, and is then always the declarant. Both options, the apostille for papers from Saudi Arabia and the work of our partners are in our guide for Gulf exporters that need an EU importer.

The first annual declaration covers calendar year 2026 and falls due by 30 September 2027. Certificate sales begin on 1 February 2027 through the common central platform. Since 1 January 2026, EU import declarations have a CBAM code in the additional reference field. All 2027 dates, including the first quarterly certificate check on 31 March 2027, are in our guide to the authorised CBAM declarant for non-EU exporters.

Why the structure is important for Saudi groups

Saudi industrial groups usually sell to Europe through traders and distributors. Under CBAM, the trader or distributor then has the declarant status, buys the certificates and calculates the carbon cost. With its own Dutch entity, your group does this itself. It imports in its own name and has the authorisation. It buys certificates at the EU carbon price and sells to European customers as a European counterparty.

Your group can check that carbon cost per product, for fertilisers, aluminium, steel or cement, in the CBAM cost calculator for Saudi Arabia.

For fertilisers, indirect emissions are also in scope. The data must be tracked from the production installation to the CBAM declaration. If your group controls this data itself, that is an important advantage in daily operations. The same entity has the EORI number, the VAT registration and the Article 23 licence. With this licence, it declares the import VAT later, in its periodic VAT return.

Paying profits back to Saudi Arabia

The Netherlands and Saudi Arabia have a double tax treaty. Saudi Arabia is also outside the Dutch list for the conditional withholding tax. A Saudi parent company can therefore own the Dutch BV directly. The Dutch BV pays its dividends to the Saudi group under the terms of the treaty.

Your group may already have a holding company elsewhere in the region. We then check with you which company should own the Dutch shares. This happens before the notary drafts the deed.

Setting up in the Netherlands

A Dutch BV is incorporated by notarial deed and registered with the Chamber of Commerce (KvK). Incorporation is done from abroad by power of attorney, with the parent company owning the shares. After registration the BV obtains its VAT number and EORI number and applies for the Article 23 licence and the CBAM authorisation. The same entity then serves as the base for EPR registrations under the Packaging Regulation and for its European contracts.

Further reading: an EU entity for CBAM and fiscal representation and Article 23.

Frequently asked questions

Which Saudi exports fall under CBAM?

The definitive phase applies to cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. For Saudi exporters, this covers shipments of fertilisers, aluminium, steel and cement. The European Commission has also proposed extending the scope to more downstream goods from 2028.

Does Saudi Arabia have a tax treaty with the Netherlands?

Yes. The Netherlands has a double tax treaty with Saudi Arabia. Saudi Arabia is also outside the Dutch list for the conditional withholding tax on dividends, interest and royalties to affiliated companies.

How long does it take a Saudi group to set up a Dutch BV?

Incorporation is done from abroad by power of attorney. The timeline depends on how quickly the notary completes due diligence on the ownership chain. For groups with several intermediate holding levels, that takes longer than for a single corporate shareholder.

What is the first CBAM deadline?

The first annual CBAM declaration covers goods imported during calendar year 2026 and falls due by 30 September 2027. Certificate sales begin on 1 February 2027 via the common central platform.