What is the EU Carbon Border Adjustment Mechanism?
The EU Carbon Border Adjustment Mechanism has applied in its definitive form since 1 January 2026. Regulation (EU) 2023/956 covers listed cement, iron and steel, aluminium, fertiliser, electricity, and hydrogen goods imported into the EU. The eight-digit Combined Nomenclature (CN) code, which is the customs product code, decides whether a good appears in Annex I.
CBAM embedded emissions are the direct production emissions and, where the rules require them, emissions from electricity used in production. A CBAM certificate is an electronic unit corresponding to one metric tonne of carbon dioxide equivalent (CO2e). The authorised CBAM declarant is the approved EU importer or customs representative responsible for the declaration and certificates.
Why does CBAM matter to you?
If you produce covered goods outside the EU, your customer may ask for the installation, 2026 reporting period, production method, tonnes produced, direct and indirect emissions, and emissions from covered input materials. It may also request the operator's emissions report and accredited verification report.
An importer can use Commission default values or verified actual values under Article 7. A company-wide Scope 1 or Scope 2 total cannot replace the product calculation. If your records do not support an actual value in tonnes CO2e per tonne of goods, the importer may have to use the applicable default.
How does CBAM work?
First, the importer checks the CN code and its total annual imports. Article 2a and Annex VII set a 50-tonne threshold per importer and calendar year across cement, iron and steel, aluminium, and fertilisers. Once exceeded, all covered imports in that year count. The threshold does not apply to electricity or hydrogen.
Next, the non-EU operator calculates emissions within the production-process boundary under Implementing Regulation (EU) 2025/2547. Actual values use calendar-year installation data, allocate emissions to the goods produced, and include covered input materials called precursors. Article 8 requires an accredited verifier to check actual values.
Finally, the authorised CBAM declarant reports imported tonnes, embedded emissions, and certificates due. The number of certificates due starts with embedded emissions, then subtracts the free-allocation adjustment and any eligible carbon price proved as paid in the country of production. The first declaration and surrender, covering 2026 imports, are due by 30 September 2027.
What mistakes should you avoid?
- Using the freight invoice or product name instead of matching the eight-digit CN code to Annex I.
- Sending warehouse, vehicle, or company-wide GHG totals instead of the installation and product data required by the 2026 method.
- Calling a value "actual" without the accredited verification required by Article 8.
- Treating 50 tonnes as a shipment or supplier threshold instead of the importer's cumulative annual threshold.
Does CBAM apply directly to a supplier outside the EU?
The authorised CBAM declarant carries the EU filing and certificate duties. Article 10 lets a non-EU operator register its installation and share verified 2026 emissions data through the CBAM Registry. A supply contract may set a separate deadline for your data.
What should you send when a customer asks for CBAM data?
Send the Commission communication template with the installation, operator, calendar year, CN code, tonnes produced, production method, direct and indirect specific embedded emissions, and precursor values where relevant. For actual values, include the operator's emissions report and the Article 8 verification report.
Who buys and surrenders CBAM certificates?
The authorised CBAM declarant buys certificates through the EU system and surrenders them in the CBAM Registry. For 2026 imports, Article 21 uses quarterly average EU Emissions Trading System auction prices, while Article 22 sets 30 September 2027 as the first surrender deadline.