CBAM carbon border adjustment mechanism

A charge on the embedded emissions of iron and steel, aluminium, cement, fertilisers, hydrogen and electricity imported into the EU. The transitional period is over: the definitive period starts on 1 January 2026, and importers must hold authorisation and surrender CBAM certificates.

Source: Regulation (EU) 2023/956 (simplified by Reg (EU) 2025/2083) · EUR-Lex text · Status baseline 2026-10-09

01What the mechanism is

CBAM is the EU border tool against carbon leakage: embedded emissions in imported goods must bear a carbon price comparable to the EU ETS. It phases in as free allocation phases out — the higher the share of free allowances retained for like EU products (the CBAM factor), the fewer certificates an importer must surrender.

Chinese companies are usually not the legal declarant (that is the EU importer or its indirect customs representative), but they sit in the data supply chain: the importer can only declare with verified embedded-emissions data and a verification report from the non-EU installation.

Legal textReg (EU) 2023/956 Art. 1, Art. 35(1) · Official guidanceCommission CBAM guidance and official Q&A

02Key timeline

Date	Milestone	Key point
2023-10-01 to 2025-12-31	Transitional period	Report embedded emissions only, no certificates; default values allowed (tightened later)
2026-01-01	Definitive period starts	Authorised declarants buy and surrender CBAM certificates; annual declaration
2027-02	Certificate sales begin (first full year)	Certificate price linked to EU ETS auction prices
2028-01〔under review〕	Downstream extension	COM(2025) 989 would add about 180 downstream steel and aluminium products; the European Parliament first reading is broader

The Article 31 CBAM factor falls each year from 2026 and reaches zero in 2034, so the effective carbon cost borne by importers converges on the full EU ETS price.

Legal textArt. 32 (schedule), Art. 31 (CBAM factor)

03Sectors and goods covered

The first step is to check whether the goods fall within the CN codes of Annex I (extended by the processing operations in Annex II), not to rely on the sector name.

Iron and steelIncluding downstream screws and bolts; remelting, hot rolling and coating all count AluminiumPlate, tube and structures; indirect emissions follow special rules CementBoth direct and indirect emissions are covered FertilisersNitrogen and other fertiliser goods; both direct and indirect emissions are covered Hydrogen and electricityHydrogen is priced on embedded emissions; electricity has its own rules

Legal textArt. 2, Annexes I–II · Official guidanceCommission list of goods by CN code

04Who must act

EU importers: must obtain authorised-declarant status, buy and surrender certificates, and file the annual CBAM declaration.
Indirect customs representatives: incur the corresponding duties when declaring on behalf of a non-EU importer.
Non-EU producers (including Chinese companies): supply embedded-emissions data and the communication template to EU customers; from the definitive period a verified report is required.

Volume thresholds and exemptions (consignments with an intrinsic value of EUR 150 or less; the 50-tonne annual aggregation threshold under the simplification rules) depend on the specific import arrangements.

Check step by step whether CBAM applies to me →

Legal textArt. 2(3), Art. 4, Reg (EU) 2025/2083 (50-tonne aggregation)

05Duties and calculation

Element	Key point	Basis
Embedded emissions	Simple goods = (direct + indirect) / output; complex goods = (attributed emissions + embedded in precursors) / output	Annex IV
Indirect emissions	Charges for steel, aluminium and hydrogen currently cover direct emissions only; cement and fertilisers cover direct + indirect	Annex IV / Q&A
Default values	Use is restricted when own data is missing; actual data is required in principle from 2024-07-01	Art. 7(2), Annex IV 4.1
Green power and PPAs	An actual low emission factor may be used where direct-connection / PPA conditions are met	Annex IV, point 6
Verification	From the definitive period an accredited verifier must verify, in principle with an on-site visit	Art. 8, Annex VI
Certificates	End-of-quarter holdings must cover 80% of emissions accumulated since the start of the year; carbon prices paid at home may be deducted	Art. 22, Art. 9

Full Q&A on duties (bubble approach, biomass, CCS, carbon-price deduction) →

Legal textReg (EU) 2023/956 Annexes III–VI · ResearchImplementing method subject to the Commission delegated acts

06Tools and materials

Goods checkerEnter CN code, origin and value to test scope and see the reporting requirements Steel / aluminium estimatorEstimate embedded emissions by good and process to support the declaration Scope checkCheck product scope, volume threshold, geography and timing one by one Official sourcesRegulation, simplification rules, implementing acts, guidance and templates Q&AConcepts, scope, compliance, certificates and pricing

Basis: Regulation (EU) 2023/956 and its annexes, Regulation (EU) 2025/2083, European Commission CBAM guidance and Q&A. This page is a compliance guide; the official text and the competent authority's interpretation prevail. Entries marked "under consideration" or "draft" may change.