The Carbon Border Adjustment Mechanism entered its full implementation phase on 1 January 2026. From October 2023 through December 2025, importers in scope had one obligation: submit quarterly transition reports. No certificates, no financial liability. That phase is over. From 2026, importing cement, steel, aluminium, fertilisers, electricity, or hydrogen into the EU requires registration, emissions reporting, and the purchase and surrender of CBAM certificates.
What CBAM is and why the EU created it
CBAM is a carbon pricing instrument applied at the EU border. Its purpose is to prevent carbon leakage: a situation where EU manufacturers face carbon costs under the EU Emissions Trading System (EU ETS) while their overseas competitors do not. Without a border measure, EU importers could simply source from countries with lower or no carbon pricing, undermining both the environmental objectives of the EU ETS and the competitiveness of EU industry.
The mechanism works by requiring importers to pay for the carbon content embedded in certain goods, at a price equivalent to what an EU producer would pay under the ETS. If the goods already carry a carbon price in the country of production, that price is deducted from the CBAM obligation. The legal basis is Regulation (EU) 2023/956 of the European Parliament and of the Council, published in the Official Journal on 16 May 2023.
CBAM covers only goods listed in Annex I of the regulation. The current scope is deliberately narrow, targeting the most carbon-intensive sectors where carbon leakage risk is highest. The European Commission has a mandate to assess whether to extend CBAM to additional sectors before 2030.
Which goods are in scope
The six product categories covered by Annex I are: cement, electricity, fertilisers, iron and steel, aluminium, and hydrogen. Within each category, coverage is defined by CN codes. Not every CN code falling under "iron and steel" is automatically in scope. The product must match one of the specific CN codes listed in Annex I.
| Product category | Key CN codes (examples) | Coverage note |
|---|---|---|
| Cement | 2523 10, 2523 21, 2523 29, 2523 90 | Clinker and specific cement types; not all building materials |
| Electricity | 2716 00 00 | Imports via interconnectors; limited practical application for most importers |
| Fertilisers | 3102, 3105 (selected) | Nitrogen-based fertilisers; mixed fertilisers only where nitrogen content is relevant |
| Iron and steel | 72 (selected), 7301, 7302, 7304–7306, 7308, 7326 | Broad coverage; includes pipes, tubes, structures, and fasteners |
| Aluminium | 7601, 7603–7608, 7610, 7612, 7615, 7616 | Primary and secondary aluminium; selected downstream products |
| Hydrogen | 2804 10 00 | All hydrogen regardless of production method |
Verify your exact CN codes against Annex I before assuming you are in or out of scope. A wrong assumption in either direction carries risk: missed registration if you are in scope, unnecessary compliance costs if you are not.
Who has to comply: the Authorised Declarant
Only a registered Authorised Declarant can import CBAM goods into the EU from January 2026 onward. This is not a role that can be delegated to your freight forwarder or customs broker automatically. The Authorised Declarant is the entity that takes responsibility for the CBAM declaration and certificate surrender. Per Article 4 of Regulation (EU) 2023/956, the importer must apply for Authorised Declarant status through the national competent authority in the EU member state where they are established.
For companies established in the Netherlands, the competent authority is the Dutch Customs Administration (Belastingdienst/Douane). The application is submitted through the CBAM Registry, the centralised EU platform managed by the European Commission. Registration is not immediate. Processing times have varied across member states, and applications submitted close to import dates have created delays.
Importing CBAM goods without Authorised Declarant status is prohibited from 1 January 2026. Customs authorities have the power to require surrender of goods or impose penalties. If you are not yet registered, apply immediately. Article 4, Regulation (EU) 2023/956.
Companies not established in the EU that import CBAM goods can only do so through an indirect customs representative who holds Authorised Declarant status, or by appointing a resident EU entity to act as the declarant. This affects supply chain structures where the non-EU parent places the EU import in the name of a local subsidiary.
How the CBAM mechanism works in practice
The CBAM compliance cycle runs annually. You import in-scope goods throughout the calendar year, track the embedded emissions in those goods, purchase the corresponding CBAM certificates, and submit your declaration by 30 September of the following year, surrendering the certificates at the same time.
The declaration covers the total embedded emissions of all in-scope goods you imported during the previous calendar year. You report both direct emissions (from the production process itself) and, for certain product categories, indirect emissions (from the electricity consumed in production). For most importers, the practical challenge is the data: where do the emissions figures come from, and how accurate are they?
Embedded emissions: actual values versus default values
You have two options for reporting embedded emissions. The first is actual values: emissions data from the specific production installation that made your goods, provided by the producer in a verified emissions report and signed by an accredited verifier. The second is default values: average carbon intensity figures published by the European Commission per country of origin and product category.
The choice has a direct cost implication. Default values are set conservatively. A steel mill running on a modern electric arc furnace with a clean energy mix will almost always produce at lower emissions than the country default. If you use actual values, your certificate obligation falls. The cost of getting there is administrative: your supplier needs to provide verified data, which takes their cooperation and an accredited verification process at their site.
| Approach | Data source | Practical cost | When to use |
|---|---|---|---|
| Default values | Commission-published tables per country and product | No supplier cooperation needed; higher certificate cost | Spot purchases, diverse supply base, suppliers unwilling to share data |
| Actual values | Verified emissions report from the production installation | Requires supplier engagement and third-party verification at source | Long-term supplier relationships, high-volume imports, low-emission producers |
For importers with a stable supplier base and meaningful CBAM volumes, the investment in actual values data typically pays back within one or two reporting cycles. For importers with fragmented sourcing, starting with default values and migrating key suppliers to actual values over time is the more practical approach.
CBAM certificates: how the price is set
CBAM certificates are purchased through the national competent authority in your member state. The price of each certificate tracks the EU ETS auction price: the Commission publishes one quarterly price per calendar quarter in 2026, and weekly prices from 2027 onwards. This means the CBAM price tracks the ETS carbon price directly.
There is no fixed price per tonne. The price changes from week to week. If you expect to surrender a large volume of certificates at the end of the year, you can purchase them throughout the year at prevailing prices rather than waiting and purchasing everything in May. This gives you the option to average your purchase price over time, similar to how companies manage currency exposure.
One constraint applies: at the end of each calendar quarter, you must hold at least 50% of the embedded emissions you have imported since the start of that year (Article 22(2), Regulation (EU) 2023/956, as amended by Regulation (EU) 2025/2083). This quarterly check prevents importers from deferring all purchases to the surrender deadline. Falling short triggers a compliance notification from the CBAM Registry.
Carbon pricing credits from the country of origin
If the country of production has an explicit carbon price that applies to the goods you are importing, you can deduct the carbon cost already paid from your CBAM certificate obligation. This deduction applies where the carbon price is effective (not merely legislated but actually paid) and where the Commission has recognised the equivalence of that pricing system.
As of 2026, the countries with recognised carbon pricing schemes for CBAM purposes include Switzerland (via the linked EU ETS-ETS agreement) and selected EEA-adjacent territories. The UK Emissions Trading Scheme is treated separately and its recognition status should be verified against current Commission guidance, as the arrangement has been subject to ongoing review. If you import from countries with no carbon pricing, the full CBAM obligation applies.
The de minimis threshold: are you exempt?
Not every importer is in scope. Since the Omnibus simplification (Regulation (EU) 2025/2083, in force October 2025 and applying from 2026), CBAM has a single de minimis: a mass-based threshold of 50 tonnes of net mass of covered goods per importer per calendar year. Importers below it are exempt from CBAM registration, reporting, declaration, and certificate surrender. The earlier EUR 150 per-consignment exemption from the transitional phase has been removed.
The 50 tonne threshold is cumulative across the four mass-based categories (cement, fertilisers, iron and steel, and aluminium); electricity and hydrogen are treated separately. You aggregate every covered consignment across the calendar year, and if you exceed 50 tonnes in total, all your CBAM goods for that year fall in scope. The mechanics, and how to count, are covered in the supporting article on the 50 tonne de minimis.
The 50 tonne de minimis is an annual, cumulative threshold per importer, not a per-consignment test. Splitting imports across consignments or entities to stay below it is treated as circumvention. Verify your exact position against Regulation (EU) 2025/2083 and current Commission CBAM guidance.
What the Omnibus simplifications changed
In 2025 the EU adopted a package of CBAM simplifications as part of the broader Omnibus initiative. The result, Regulation (EU) 2025/2083, was published on 17 October 2025 and entered into force on 20 October 2025. Its central change for importers is the de minimis regime: the per-consignment EUR 150 exemption was replaced with a single mass-based threshold of 50 tonnes per importer per year.
The Commission estimates this removes roughly 90% of importers from CBAM obligations while keeping about 99% of embedded emissions in scope, and it will review the threshold annually to hold that coverage. If you were told during the transition phase that you would need to comply, re-check your position: under the 50 tonne threshold you may now be out of scope, or the reverse. Verify the current figures against the text of Regulation (EU) 2025/2083. The Commission's CBAM portal at taxation-customs.ec.europa.eu is the authoritative source for current threshold values.
What happens if you miss the 30 September deadline
The annual CBAM declaration and certificate surrender must be completed by 30 September. For declarations covering the 2026 calendar year, the deadline is 30 September 2027. Miss this deadline and the competent authority issues a notice requiring surrender within a specified period. If you still fail to surrender, Article 26 of Regulation (EU) 2023/956 provides for a penalty based on EUR 100 per tonne of CO2 equivalent, with multipliers up to five times that amount per unsurrendered tonne.
The penalty is not capped at a fixed amount per declaration. For importers with significant CBAM volumes, the exposure is material. A 10,000-tonne embedded emissions shortfall at EUR 100 per tonne base penalty, with the maximum multiplier of five, produces a EUR 5 million fine. Competent authorities also retain the power to suspend or revoke Authorised Declarant status for serious or repeated non-compliance, which would prevent further imports of CBAM goods entirely.
The annual declaration is not an estimate. It is a verified figure. Submitting incorrect data with negligent disregard for accuracy carries the same penalty as non-submission under Article 26, Regulation (EU) 2023/956.
What to do now
If you import any Annex I goods and have not yet registered as an Authorised Declarant, that is the first step. Registration takes weeks, not days, and without it you cannot legally import in-scope goods. Check whether your CN codes are listed in Annex I of Regulation (EU) 2023/956. If they are, contact your national competent authority immediately.
Once registered, the priority decisions are: which suppliers you will ask for actual emissions data, which you will cover with default values for the first reporting cycle, and what your certificate purchase strategy looks like given your expected volumes and the current ETS price trajectory. These decisions affect your cost base for the full 2026 calendar year.
If you are unsure whether CBAM applies to your product range or supply chain, a scoping assessment is the right starting point. The exercise maps your CN codes against Annex I, identifies which import flows carry material embedded emissions, and produces a first-year cost estimate based on current default values and the prevailing ETS price. In most cases a small subset of your in-scope volume drives the majority of the certificate cost. That is where supplier engagement on actual values makes the most financial sense.