CBAM obligations FAQ

CBAM (the carbon border adjustment mechanism) puts a price on the embedded emissions of goods imported into the EU, preventing ‘carbon leakage’ — that is, companies relocating carbon-intensive production to regions with looser climate policy, or EU products being replaced by higher-carbon imports. It aligns the carbon price of imported goods with that inside the EU while remaining compatible with WTO rules.

It mainly covers cement, iron and steel, aluminium, fertilisers, hydrogen and electricity. Whether it applies must be determined by Combined Nomenclature (CN) code against Annex I to the Regulation, not by sector name — for example, steel includes downstream products such as screws and bolts, and aluminium includes aluminium plates, tubes and structures.

Official basisRegulation (EU) 2023/956 Annex I

• Transitional period (2023-10-01 to 2025-12-31): reporting only, no charge.
• Definitive period (from 2026-01-01): importers must purchase and surrender CBAM certificates.

Official basisRegulation (EU) 2023/956 Article 32

Yes. Following assessment, the Commission plans to extend the scope to further sectors covered by the EU ETS (such as glass, ceramics and paper) and may include organic chemicals and polymers; a proposal to extend it to downstream products is also in the legislative process.

Official basisRegulation (EU) 2023/956 Article 30(2); COM(2025) 989 (under review)

• EU importers: companies importing CBAM goods into the EU (authorised declarants).
• Indirect customs representatives: service providers handling customs declarations on behalf of non-EU importers.

In the definitive period a minimum mass threshold of 50 tonnes per year applies; above that threshold, authorised declarant status must be applied for.

Three conditions: the product is exported to the 27 EU Member States; the product falls within a CBAM-covered sector; and the EU importer's annual import volume exceeds the threshold. Even if you do not export directly, you must provide your product's carbon emissions data whenever a customer needs to report.

A consignment whose CBAM goods have an intrinsic value of no more than EUR 150 is exempt; however, artificially splitting consignments to circumvent the rules is a breach.

Official basisRegulation (EU) 2023/956 Article 2(3)(a); Q&A #29

No. Legal responsibility for reporting rests with the ‘declarant’ (usually the EU importer or its customs representative). You must, however, provide that declarant with your product's embedded emissions data.

Official basisRegulation (EU) 2023/956 Article 35(1); Q&A #40

Information in the registry is confidential: apart from the operator's name, address and installation location, data is protected by professional secrecy obligations. Since January 2025, non-EU operators may register in the registry and choose to disclose data to specific declarants, without sending sensitive documents through unencrypted channels.

Official basisRegulation (EU) 2023/956 Article 14(4); Q&A #52, #134

Yes. Non-EU operators may apply to register in the CBAM registry, obtain an ID and enter emissions data; registration is valid for 5 years and facilitates disclosure to multiple EU customers.

Official basisRegulation (EU) 2023/956 Article 10; Q&A #41, #120

• Calculate the embedded emissions of the product in accordance with the CBAM methodology;
• Provide carbon emissions data to the EU importer;
• Use the EU communication template to transmit the data;
• (Definitive period) obtain a verification report from an accredited verifier.

They cover direct emissions (scope 1) and indirect emissions (electricity and heat consumed, scope 2); for some sectors they also include emissions embedded in input materials and fuels.
Simple goods: (direct + indirect) / output; complex goods: (attributed emissions + embedded emissions of precursors) / output.

Official basisRegulation (EU) 2023/956 Annex IV; Q&A #68, #115

Yes. In addition to direct emissions from the production process, complex goods include the embedded emissions of consumed precursors (which are themselves CBAM goods).

Official basisRegulation (EU) 2023/956 Annex IV Point 3; Q&A #62

During the transitional period all sectors report indirect emissions. In the definitive period, for iron and steel, aluminium and hydrogen only direct emissions are charged, while for cement and fertilisers both direct and indirect emissions are charged (to avoid double protection alongside electricity price compensation under the EU ETS).

Official basisRegulation (EU) 2023/956 Annex IV; Q&A #39, #115, #121

In the early transitional period (imports before 2024-06-30), EU default values may be used where actual data is missing. Thereafter actual data must be reported; where it genuinely cannot be obtained, estimates are permitted only for emissions contributing less than 20% of a complex good's emissions.

Official basisRegulation (EU) 2023/956 Article 7(2), Annex IV Point 4.1; Q&A #77, #178

Yes, where the conditions are met. Where low-carbon electricity is used through a direct technical link or a power purchase agreement (PPA), actual low-emission factors may be used to calculate indirect emissions. PPA conditions: a direct contract between buyer and seller; electricity generated in a location directly connected to the EU grid or without congestion; generating installations with emissions of no more than 550 gCO₂/kWh; and electricity strictly nominated and allocated in the same time period.

Official basisRegulation (EU) 2023/956 Annex IV Point 6; Q&A #69, #93

Yes. Conversion steps such as remelting, casting, hot rolling, cold rolling, forging and coating are within the system boundary and must be included.

Official basisRegulation (EU) 2023/956 Annex II; Q&A #86

Where a complex good (such as steel tube) and its precursors (such as steel billet) are produced at the same plant, a ‘combined production process system boundary’ may be defined, so that intermediate product emissions need not be calculated separately and the whole production process is assessed as one.

Official basisQ&A #64

Conditionally. Biomass used as a process input (such as a reducing agent) has zero emissions; when used as a fuel, combustion emissions count as zero only if the sustainability and greenhouse gas saving criteria of the Renewable Energy Directive (RED II) are met.

Official basisQ&A #80, #187

Yes. Captured CO₂ that is used to manufacture products and permanently chemically bound, or transferred to long-term geological storage, may be deducted when calculating embedded emissions.

Official basisQ&A #73; Regulation (EU) 2023/956 Annex III Section B.8.2

External verification is not mandatory during the transitional period (until the end of 2025). Emissions data declared in the definitive period (from 2026) must be verified by an accredited verifier.

Official basisRegulation (EU) 2023/956 Article 8; Q&A #38

In principle an on-site visit is required; an exemption is possible only where specific conditions (such as force majeure) are met and approved.

Official basisRegulation (EU) 2023/956 Annex VI Point 1(c), Article 8(3)(a)

The body must be ‘accredited’: verification must be carried out by a verifier accredited by a national accreditation body (NAB) under the relevant EU legislation.

Official basisRegulation (EU) 2023/956 Article 18; Q&A #126, #127

Where a report is incomplete or incorrect, the competent authority of the Member State initiates a correction procedure; if it is not corrected as required, the declarant (your customer) faces a penalty of EUR 10–50 per tonne of unreported emissions, and the commercial relationship is affected.

Official basisRegulation (EU) 2023/956 Article 26; Q&A #17, #76

A standardised form provided by the European Commission for non-EU producers to transmit carbon emissions data to EU importers. It contains installation information, production process data, embedded emissions calculation results and a list of supporting documents, with completed examples for each sector.

• Returned goods: where specific customs conditions are met (such as return within three years), embedded emissions may be reported as ‘zero’.
• Inward processing followed by re-export: generally no charge; a charge arises if the goods are ultimately released for free circulation in the EU.
• Inward processing followed by sale in the EU: where CBAM goods are processed into finished products no longer falling within CBAM scope but released for free circulation in the EU, the embedded emissions of the raw materials must be reported and paid.

Official basisRegulation (EU) 2023/956 Article 6(3), 6(5), 34(1); Q&A #10, #66, #109

An electronic certificate purchased and surrendered by the authorised declarant, each representing 1 tonne of CO₂. The price is based on the EU ETS allowance auction price: quarterly average in 2026, weekly average from 2027; the Commission publishes the price weekly in the CBAM registry.

Official basisRegulation (EU) 2023/956 Article 21; Q&A #129

A minimum ‘stock level’ must be maintained: at the end of each quarter, the number of certificates in the account must cover at least 80% of the embedded emissions of goods imported since the start of the year.

Official basisRegulation (EU) 2023/956 Article 22(2); Q&A #128

Yes. Where it can be shown that embedded emissions have effectively paid a carbon price in the country of origin, the number of certificates to be surrendered is reduced accordingly. The deduction is calculated on the carbon price ‘actually paid’; free allocation and other compensation received in the country of origin must be deducted, and must not be counted twice.

Official basisRegulation (EU) 2023/956 Article 9(1); Q&A #134

The EU will adopt detailed rules on currency conversion; foreign-currency carbon prices are normally converted to euro at the annual average exchange rate for deduction purposes.

Official basisRegulation (EU) 2023/956 Article 9(4); Q&A #134

They move in opposite directions: the number of certificates to be purchased is reduced by the proportion of free allocation received by equivalent EU products (the CBAM factor). For example, the CBAM factor is 97.5% in 2026, declining each year to 0% in 2034.

Official basisRegulation (EU) 2023/956 Article 31; Q&A #132

Strictly limited: certificates are primarily for surrender in the current year, and certificates remaining in the account after 30 June each year are cancelled without compensation. A buy-back may be requested after surrender, but the quantity may not exceed one third of the total purchased in the previous year.

Official basisRegulation (EU) 2023/956 Articles 23, 24; Q&A #130

Very high risk. This is explicitly defined as ‘circumvention’: where a product is slightly modified to fall under a non-CBAM code but its essential characteristics are unchanged, the Commission may add it to the CBAM list.

Official basisRegulation (EU) 2023/956 Article 27; Q&A #30

A proposed provision (Article 27a) exists: where unforeseeable serious circumstances cause the price of CBAM goods to cause serious harm to the EU internal market, the Commission may temporarily remove the good from the list; if the removal is retroactive, charges for certificates already surrendered may be refunded.

Official basisQ&A on Article 27a, Q1–Q3

• Transitional period: penalties (set by each Member State).
• Definitive period: inability to import CBAM goods (no authorised declarant status), a penalty of EUR 10–50 per tonne of unreported emissions, and revocation of authorised declarant status.

Official basisRegulation (EU) 2023/956 Article 26

• This site: applicability assessment, goods lookup tool, official sources inventory.
• The European Commission's official CBAM pages and the customs and tax learning portal.
• A professional CBAM compliance adviser or lawyer.