We’ve seen a raft of new taxes and tariffs come into force around the world in recent years. For example, the EU Carbon Border Adjustment Mechanism (CBAM) is being introduced to maintain the EU’s climate objectives and encourage cleaner industrial production in non-EU countries. CBAM requires companies to pay the market price of carbon emissions on imported goods if the goods don’t meet EU standards. Initially applying to energy-intensive products like steel, iron, aluminum, cement, and fertilizers, CBAM has reporting requirements today and financial obligations from 2026.

Beyond this, many countries are introducing tariffs to safeguard domestic industries against unfair trade practices. New AI agents from Microsoft help supply chain professionals navigate this complexity, accelerating scenario planning, risk mitigation, and process automation.

At Hannover Messe, Avanade is showcasing how Microsoft Cloud for Sustainability and the new EU CBAM Agent help supply chain professionals make better purchasing decisions. The AI agent uses data from Microsoft Sustainability Manager and Copilot Studio to estimate carbon fees for importing steel from suppliers using different production methods. Electric arc furnaces that use recycled steel and renewable energy have a significantly lower footprint compared to coal-fired blast furnaces. Integration with Microsoft Dynamics 365 simplifies procurement processes and carbon fee management under the EU Corporate Sustainability Reporting Directive (CSRD).

The new EU regulations ensure goods produced with less stringent emissions standards do not compete unfairly with EU goods. Using Microsoft Copilot, supply chain professionals can estimate carbon fees from various suppliers, making better purchasing decisions to minimize costs and mitigate supply and regulatory compliance risks.

The new AI agent demonstrates the power of the Microsoft suite across the manufacturing value chain. Procurement professionals must consider multiple variables when making purchasing decisions. AI agents can help assess total landed costs, including currency conversion charges, transport fees, import duties, and environmental taxes. They can even suggest reclassifying products to lower EU CBAM duties. Semi-finished steel products used as raw materials have a lower carbon footprint as they require further processing.