CBAM is the EU's tool to prevent 'carbon leakage' — the phenomenon of production shifting to jurisdictions with weaker climate rules. It puts a carbon price on imports of the most emission-intensive goods, matching what EU producers pay under the ETS.
The transitional phase runs from October 2023 to end-2025 with reporting-only obligations. From 1 January 2026, importers must buy and surrender CBAM certificates covering the embedded emissions of imported goods.
This guide walks through what's covered, who is responsible, how emissions are calculated, and the practical steps EU importers should take now.
Covered goods and scope
Six sectors: cement, iron & steel, aluminium, fertilisers, electricity, and hydrogen. Downstream products containing these materials (screws, tubes, structural sections, etc.) are included via specific CN codes.
The obligation falls on the EU importer of record. Non-EU producers are not directly regulated but must supply verified emissions data if they want their goods to remain competitive after 2026.
Emissions calculation methodology
Actual emissions are preferred: direct emissions from the production process, indirect (electricity) emissions where relevant, and precursor material emissions embedded upstream. Default values are available during transition but from mid-2026 they carry a penalty premium — using verified actuals will be cheaper.
Verification must come from an accredited third party using the EU CBAM methodology; national verification schemes are being harmonized.
Interactive tool
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CBAM cost estimator
Rough annual CBAM exposure for goods imported into the EU. Based on default embedded-emission intensities.
Estimated embedded emissions
1,000
tCO₂e
Indicative annual CBAM cost
€42,500
Actual liability = (embedded emissions × certificate price) minus any verified carbon price paid in origin country, adjusted for the CBAM phase-in schedule (2.5% free in 2026 → 0% by 2034).
The 2026 certificate mechanism
Importers register as authorised CBAM declarants, submit an annual CBAM declaration by 31 May of the following year, and surrender certificates equal to embedded emissions × (ETS price − any effective carbon price already paid in the country of origin).
Certificates are sold at the weekly average ETS auction price. Free allocation to EU producers phases out in parallel with CBAM phase-in through 2034.
Reporting practicalities: the CBAM Registry and quarterly submissions
During the transitional phase, importers submit quarterly CBAM reports through the CBAM Transitional Registry. Each report covers embedded emissions of imports for the quarter, split by CN code, country of origin, and installation. The first quarterly report was due 31 January 2024 covering Q4 2023.
Missing a quarterly report or filing incomplete data triggers penalties of €10–50 per tonne of unreported embedded emissions. Non-EU installations without a CBAM Registry entry can force EU importers back to default values — which will carry a cost penalty from mid-2026.
How to prepare your supply chain in 2026
Map every affected import: pull 12 months of customs entries, filter by the CBAM CN codes, and identify each non-EU installation supplying you. Most importers discover 3–8 covered products from 5–15 installations.
Contract with each installation: get them to provide monitored emissions data on a documented methodology (installation-level + relevant + precursor emissions). Bake data delivery into 2026 purchase agreements as a supplier obligation, not an ask.
Model the 2026 financial impact: multiply expected annual embedded emissions × current ETS price (roughly €70–90/ in 2026) to size the certificate cost. For a mid-size steel importer, this typically lands in the €50k–500k/year range — enough to affect procurement decisions.
FAQ
Frequently asked questions
Who reports CBAM?
The EU importer of record. Non-EU producers can register in the CBAM Registry to make it easier for their customers.
What's the deadline for the annual declaration?
31 May of the year following the import (first full declaration: 31 May 2027 for 2026 imports).
Can I use default emission values?
During the transitional phase, yes. From mid-2026 defaults will carry a penalty; verified actuals are cheaper.
Does CBAM affect exports from the EU?
No, CBAM applies to imports only. There is ongoing debate about export rebates but nothing enacted.
How much do CBAM certificates cost per tonne?
They track the weekly average EU ETS auction price. In 2025–2026 that has ranged €70–90/tCO2e. Budget accordingly against your imported tonnage of covered goods.
What happens if my non-EU supplier refuses to share verified emissions data?
You fall back on default values, which carry a penalty premium from mid-2026 (roughly 20–40% higher than typical actuals). For high-volume imports, this alone justifies switching suppliers or investing in the data collection.
Automate CBAM emissions collection from your suppliers
Vuneli collects verified embedded-emissions data directly from your non-EU suppliers and generates the CBAM declaration your customs broker needs.
