CBAM — Carbon Border Adjustment Mechanism

Status

• In force: 17 May 2023

• Transitional period: 1 October 2023 – 31 December 2025 (quarterly reporting only; no financial obligation)

• Definitive regime: from 1 January 2026; the first declaration and certificate surrender for 2026 imports are due by 30 September 2027

• 50-tonne exemption: Regulation (EU) 2025/2083 exempts an importer whose cumulative annual net mass does not exceed 50 tonnes across cement, iron and steel, aluminium, and fertilisers. Electricity and hydrogen do not receive this exemption

• CBAM certificates: Certificates for 2026 emissions are sold from 1 February 2027. Their price uses quarterly EU ETS auction averages for 2026 imports and weekly averages from 2027 onwards

• EU ETS phase-out of free allowances: Free EU ETS allowances for CBAM sectors are being phased out 2026-2034 in parallel, ending any double-protection for EU producers

• Simplification adopted: Regulation (EU) 2025/2083 entered into force in October 2025 and changed the threshold, declaration date, certificate timetable, verification, and default-value rules

• Scope review: The Commission proposed adding selected steel- and aluminium-intensive downstream goods from 2028. As of 15 August 2026 the proposal remains in the legislative process; it does not add pulp or paper

Scope

Six current CBAM goods (in force from definitive regime 2026)

The Annex I CN code, including every stated exclusion, is the legal scope test. A sector label or the table above is not a substitute for classifying the imported good against the current Combined Nomenclature.

What is not in scope currently

• Pulp and paper

• Chemicals (other than listed fertilizers)

• Downstream manufactured goods using CBAM inputs, unless and until the December 2025 downstream-extension proposal is adopted and applies

• Goods originating in the countries and territories listed in Annex III; check the current consolidated annex rather than inferring exemption from the existence of a domestic carbon price

The 50-tonne annual threshold

For cement, iron and steel, aluminium, and fertilisers, the threshold is cumulative per importer and calendar year, across all four sectors. Staying at or below 50 tonnes exempts that importer for that year. Crossing it brings all covered imports during that calendar year into the mechanism, not only the tonnes above the threshold. The threshold does not apply to electricity or hydrogen.

Who is the "declarant" (obligated party)

CBAM applies to the importer of CBAM goods into the EU customs territory. Specifically:

• The EU-established importer if import is made in their own name

• The indirect customs representative if the importer is established outside the EU

Non-EU installation operators can register their installation and emissions information in the CBAM Registry. The EU importer remains responsible for its declaration; commercial requests for producer data do not make the exporter the CBAM declarant.

Structure

Transitional period (October 2023 – December 2025, historical)

Obligations during transitional period:

• Quarterly reporting via the CBAM Transitional Registry (web-based system)

• Report embedded emissions in CBAM goods imported each calendar quarter

• No financial obligation — no certificates required

• Transitional calculation and default-value rules applied under Implementing Regulation (EU) 2023/1773. They should not be reused as a statement of the definitive-regime methodology

Transitional reports were generally due one month after each quarter. Those historical deadlines no longer describe the definitive regime.

Definitive regime (from 1 Jan 2026)

Embedded emissions — what must be calculated

CBAM covers embedded emissions — the GHG emissions released during the production of the goods:

• Direct emissions (Scope 1 at production site): Emissions from the production process itself

• Indirect emissions (electricity): Included where the regulation and its annexes require them. Goods listed in Annex II use direct emissions only; the applicable CN code and current annex determine the treatment

The definitive-regime calculation rules sit in Article 7 and Annex IV of the consolidated CBAM Regulation, together with the implementing and delegated acts collected on the Commission's legislation and guidance page. Implementing Regulation (EU) 2023/1773 governed transitional reporting and should not be treated as the complete definitive-regime rulebook.

Relationship with EU ETS

CBAM is designed as the "border mirror" of the EU ETS. EU producers pay for their emissions via EU ETS allowances; CBAM makes non-EU producers face an equivalent carbon cost on EU imports, preventing carbon leakage.

The phase-out of free EU ETS allowances for CBAM sectors (Art. 30c EU ETS Directive, as amended) runs 2026–2034:

• 2026: CBAM factor 97.5%

• 2027: 95%; 2028: 90%; 2029: 77.5%

• 2030: 51.5%; 2031: 39%; 2032: 26.5%; 2033: 14%

• From 2034: no CBAM factor applies

Until free allowances fully phase out, the number of certificates to surrender is adjusted to reflect free EU ETS allocation. Article 9 separately allows a reduction for an eligible carbon price effectively paid in a third country, subject to its evidence rules.

Key obligations (top 10 for CBAM declarants)

1. Articles 4, 5 and 17 — Authorisation — Apply in the CBAM Registry through the national access route. In Sweden, registry access runs through Tullverket's services and Naturvårdsverket decides the authorisation. A person subject to the definitive regime must hold authorised-declarant status; the temporary continuation rule applied only where an application was submitted by 31 March 2026 and remained undecided.

2. Threshold monitoring — Track cumulative net mass across the four threshold sectors. If the importer crosses 50 tonnes during a year, the obligations apply to all its covered imports for that year. Electricity and hydrogen are outside this exemption.

3. Art. 7 — Embedded emissions calculation — Determine emissions using actual values under Annex IV or the Commission default values. Apply the direct-only treatment to Annex II goods and the electricity-specific method where relevant.

4. Verification when using actual emissions — Actual emissions declared under Article 6 must be verified by a verifier accredited under Article 18. Default-value declarations do not become actual-value declarations merely because supplier data exists.

5. Art. 6 — Annual CBAM declaration — File in the Registry by 30 September each year. The first declaration, covering 2026 imports, is due on 30 September 2027.

6. Art. 22(1) — Certificate surrender — Surrender the required certificates by 30 September, after deducting an eligible carbon price paid in a third country and applying the adjustment for EU ETS free allocation.

7. Certificate planning — Certificate sales start on 1 February 2027. From 2027, the quarter-end account balance generally must cover at least 50% of embedded emissions imported since the start of the year, calculated under Article 22(2). Repurchase and cancellation are governed by Articles 23 and 24.

8. Art. 9 — Carbon price adjustment — If the exporting country has charged a verified carbon price on the embedded emissions, the CBAM obligation is reduced by the equivalent amount. Document and evidence the carbon price paid.

9. Default values vs actual emissions — Definitive-regime defaults are set by exporting country and good, with a proportionate mark-up; where reliable country data cannot be used, the regulation uses the average intensity of the ten highest-intensity exporting countries with reliable data. Use actual values only with the required verification.

10. Legislative watch — Monitor the December 2025 proposal for selected steel- and aluminium-intensive downstream goods. The Council agreed its position in June 2026, but the proposal is not current law as of this review date.

Applicability questions — Questions to answer

1. Do you import into the EU customs territory any goods in the six current CBAM sectors — cement, iron and steel, aluminium, fertilizers, electricity, or hydrogen (Annex I CN codes)?

2. Are you the EU-established importer acting in your own name, or the indirect customs representative for an importer established outside the EU (the two "declarant" roles)?

3. Do the goods originate in a country or territory currently listed in Annex III, rather than merely a country that operates some form of carbon pricing?

4. Are you importing CBAM goods from 1 January 2026 onwards (definitive regime: authorisation, annual declaration, certificate surrender), or only during the transitional period 1 October 2023 – 31 December 2025 (quarterly reporting, no financial obligation)?

5. Are you a non-EU installation operator whose EU customers need actual emissions data, and have you registered the installation and data in the CBAM Registry where appropriate?

6. Has the exporting country charged a verified, documented carbon price on the embedded emissions (Art. 9 reduction of the CBAM obligation)?

7. Do you import goods that appear in the Commission's pending downstream-extension proposal, and are you tracking that proposal without treating it as current law?

If none of the triggering facts hold, preserve the negative scoping evidence and review it when the organisation's imports or the law change.

Cross-references

• CSRD overview — sustainability-reporting context for emissions information

• CSDDD overview — value-chain due-diligence context

• Cross-cutting: Scope 3 reporting — treatment of value-chain emissions outside the CBAM calculation itself

• [EU ETS (external reference)] — CBAM prices use EU ETS auction averages: quarterly for emissions embedded in 2026 imports and weekly from 2027; the free-allocation phase-out is the companion mechanism

• CBAM (Regulation (EU) 2023/956, OJ L 130, 16.5.2023): https://eur-lex.europa.eu/eli/reg/2023/956/oj

• Transitional reporting Implementing Regulation (EU) 2023/1773: https://eur-lex.europa.eu/eli/reg_impl/2023/1773/oj

• European Commission — CBAM implementation: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

• CBAM Transitional Registry (EU Taxation and Customs Union): https://cbam.ec.europa.eu/

• Commission guidance — transitional period: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/guidance-documents_en

• Simplification Regulation (EU) 2025/2083: https://eur-lex.europa.eu/eli/reg/2025/2083/oj

• Consolidated CBAM Regulation after the simplification: https://eur-lex.europa.eu/eli/reg/2023/956/2025-10-20/eng

• EU ETS Directive amendment containing the CBAM-factor schedule (Directive (EU) 2023/959): https://eur-lex.europa.eu/eli/dir/2023/959/oj

• Commission CBAM definitive-regime guidance: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-definitive-regime_en

• Commission CBAM legislation and guidance index: https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-legislation-and-guidance_en

• Tullverket — CBAM import guidance for Sweden: https://www.tullverket.se/foretag/internationellhandel/restriktioner/koldioxidutslappgransjusteringsmekanismvidimportcbam.4.3e6caad21870dc6781c46d8.html

• Commission Article 30 review report (COM(2025) 783 final): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025DC0783

• Downstream-extension proposal (COM(2025) 989 final): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025PC0989

Last reviewed

2026-08-15 · Saga editorial team

This briefing summarises the regulator's text; for binding interpretation, consult counsel.