What CBAM is and why it exists
The EU Carbon Border Adjustment Mechanism is a carbon pricing instrument that puts a price on the greenhouse gas emissions embedded in certain goods imported into the EU. It was created to address carbon leakage: the risk that EU producers, who pay the EU Emissions Trading System carbon price, are undercut by imports from countries with weaker or no carbon pricing. CBAM levels the field by requiring importers to pay a carbon cost equivalent to what an EU producer of the same goods would pay.
CBAM ran in a transitional phase from October 2023 through the end of 2025, during which importers only had to report embedded emissions with no financial obligation attached. That phase ended on 1 January 2026. The definitive phase is now live, and the financial obligations are real.
Transitional phase is over
Many importers tracked CBAM during 2024 and 2025 as a reporting exercise. From 1 January 2026 that changed. The definitive phase requires authorised declarant status, third-party verified emissions data, and the purchase and surrender of CBAM certificates. If your preparations stalled at the reporting stage, you are now behind.
Which goods are covered
CBAM applies to six sectors, defined by specific Combined Nomenclature codes:
- Iron and steel: Including pig iron, sponge iron, flat and long steel products, tubes, pipes, structural profiles, and downstream products such as bolts and nuts. This is the largest and most complex category by CN code count.
- Aluminium: Including unwrought aluminium, powders, flakes, bars, rods, profiles, wire, plates, sheets, and foil.
- Cement: Clinker, cement, and related products.
- Fertilisers: Specific nitrogen-based and other fertilisers classified under the relevant CN headings.
- Hydrogen: Including various forms regardless of production method.
- Electricity: Electrical energy imports, with no 50-tonne exemption threshold applied.
The covered CN codes are listed in Annex I of Regulation (EU) 2023/956. If your goods sit near the boundary of these categories, checking the precise CN code before booking is worth the time. A product just outside the covered codes has no CBAM obligation; one just inside does.
CBAM covers goods, not shipping services
CBAM does not apply to freight services, logistics, or the shipping of goods in general. It applies to the physical goods themselves, classified by their CN code. However, steel or aluminium components imported as part of a larger product may or may not be covered depending on how they are classified at customs. When in doubt, confirm the CN classification with your customs broker before the shipment arrives.
Who needs to be authorised
To import covered goods into the EU from 1 January 2026, you must be an authorised CBAM declarant. Only authorised declarants can import covered goods. If your annual imports of covered goods exceed 50 tonnes in aggregate, you were required to apply for authorised status by 31 March 2026. If you missed that deadline or are starting to import covered goods now, you need to apply as soon as possible through the CBAM Registry, the EU platform managed by national customs authorities.
The 50-tonne threshold is calculated across all covered goods for the calendar year, not per shipment or per product type. Electricity and hydrogen have no threshold: if you import either, you need authorised status regardless of volume.
How CBAM certificates work
CBAM certificates are the instrument importers use to discharge their carbon obligation. Each certificate represents one tonne of CO2 equivalent. You buy them through the CBAM Registry at a price that tracks the EU ETS carbon market. In Q1 and Q2 2026, the European Commission published reference prices of around 75.36 and 75.28 euros per tonne respectively, calculated from the weighted average of EU ETS auction clearing prices. EU ETS spot prices in July 2026 were trading in the range of 79 to 85 euros per tonne.
The number of certificates you must surrender is:
- Quantity of goods imported (in tonnes) multiplied by the verified embedded emissions factor (tCO2e per tonne of product), multiplied by the CBAM factor, minus any carbon price already paid in the country of origin with certified evidence.
- If you cannot provide verified embedded emissions data, the competent authority applies default values, which are set at the higher end of the range for the relevant sector and are generally less favourable than verified actuals.
- The surrender deadline for all 2026 imports is 30 September 2027. You hold certificates in your CBAM Registry account until that date, then surrender them.
The third-party verification requirement
During the transitional phase, self-reported emissions data was accepted. In the definitive phase it is not. Every embedded emissions figure you submit in your CBAM declaration must be verified by an accredited third-party verifier. That verifier checks the production data, the emissions calculation methodology, and the supporting documentation against the relevant EU standards.
Getting verified data from your non-EU suppliers is the hardest operational challenge in CBAM compliance for most importers. Suppliers in countries without mandatory carbon reporting have not previously had to calculate or disclose production-level emissions. You may need to work through your freight forwarder, your trade compliance team, or a specialist CBAM consultant to obtain compliant data before the declaration deadline.
Default values hurt
If you declare without verified supplier data, the authority applies default values. These are typically calculated at the 90th percentile of emissions intensity for the relevant sector, meaning they are deliberately set high to incentivise getting real data. On a large import volume, the difference between a verified actual and a default value can mean tens of thousands of euros in extra certificate costs. Getting verified data from your supplier is worth the effort.
Carbon price already paid at origin
CBAM includes a deduction for carbon prices already paid in the country of production. If your supplier paid a domestic carbon tax or participated in an emissions trading scheme in their country, you can deduct the equivalent carbon cost from your CBAM liability. This prevents double taxation and is designed to reward origin countries that have carbon pricing.
To claim the deduction you need certified evidence of the carbon price paid, the amount, and that it was not refunded or offset elsewhere. The documentation requirements are specific. Countries with ETS systems or carbon taxes linked to the EU's standards, such as the UK and Switzerland, are the most straightforward cases. For countries without formal carbon pricing, the deduction is generally zero.
Key dates for 2026 and 2027
- 1 January 2026: Definitive phase live. Only authorised declarants can import covered goods.
- 31 March 2026: Deadline to apply for authorised declarant status for importers expecting more than 50 tonnes annually. If you missed this, apply now.
- Throughout 2026: Track all imports of covered goods, collect verified emissions data from suppliers, and purchase CBAM certificates as needed.
- 30 September 2027: Deadline to file the first annual CBAM declaration covering all 2026 imports and surrender the corresponding certificates.
- From 2027 onwards: Certificate prices will be calculated and published weekly rather than quarterly, giving importers more frequent price signals.
What to do now if you import covered goods
- Confirm your CN codes. Check every product you import against Annex I of Regulation (EU) 2023/956. If any fall within the covered categories, CBAM applies.
- Register as an authorised declarant through the CBAM Registry if you have not already. Without authorisation you cannot legally import covered goods.
- Contact your suppliers and request verified embedded emissions data now. Give them time to get the data certified by an accredited verifier before your next shipment.
- Track your 2026 imports by volume. You need a complete record of every covered shipment this year, with the associated verified emissions data, ready for the September 2027 declaration.
- Understand the deductions. If your supplier is in a country with carbon pricing, gather the certified evidence of what was paid so you can reduce your certificate cost.
- Monitor the certificate price. CBAM certificates track EU ETS prices. If you are importing large volumes, you may want to purchase certificates in advance to manage price risk rather than buying at the prevailing price just before the deadline.
The bottom line
CBAM is no longer a future compliance exercise. Since 1 January 2026, importing steel, aluminium, cement, fertilisers, hydrogen, or electricity into the EU above the 50-tonne threshold requires authorised declarant status, verified emissions data, and purchased certificates priced to the EU carbon market. With Q1 and Q2 2026 certificate prices around 75 euros per tonne, the cost is real and scales with volume and emissions intensity. The first surrender deadline is September 2027, but the data and authorisation groundwork has to be laid now. If you import covered goods and have not yet confirmed your declarant status or started collecting verified supplier emissions data, those are the two things to do first.