CBAM: Definitive Regime from 2026
The Carbon Border Adjustment Mechanism (CBAM) will fully enter into force on 1 January 2026, marking the beginning of its definitive regime. From that date, EU importers and their indirect customs representatives will be required to comply with new obligations aimed at aligning the carbon cost of imported goods with that of EU production.
Economic operators are strongly encouraged to carefully review the rules and submit their applications through the Authorisation Management Module as early as possible, in order to obtain the status of authorised CBAM declarant.
Who must apply for authorised CBAM declarant status
EU importers, or their indirect customs representatives, importing more than the single mass-based threshold of 50 tonnes of CBAM-covered goods per year into the European Union are required to apply for authorised CBAM declarant status.
Once authorised, importers will be able to purchase CBAM certificates from the national competent authorities of the Member State in which they are established.
CBAM certificates and pricing
The price of CBAM certificates will be linked to the EU Emissions Trading System (EU ETS). Specifically:
- In 2026, certificate prices will be calculated as a quarterly average of EU ETS allowance auction prices;
- From 2027 onwards, prices will be based on a weekly average expressed in euros per tonne of CO2 emitted.
Each year, EU importers will be required to declare the embedded emissions of their imported goods and surrender the corresponding number of CBAM certificates.
Deduction of carbon prices paid abroad
If importers can demonstrate that a carbon price has already been paid in a third country during the production of the imported goods, the equivalent amount may be deducted from the CBAM obligation, in accordance with EU rules.
CBAM transitional phase (2023–2025)
The CBAM entered into application on 1 October 2023 with a transitional phase lasting until the end of 2025. The first reporting period concluded on 31 January 2024.
This transitional period was designed as a pilot and learning phase for importers, producers and public authorities. During this time, stakeholders were required to report emissions data without purchasing certificates, allowing the EU to refine methodologies ahead of the definitive regime.
Goods covered by CBAM
During its initial scope, CBAM applies to imports of goods and selected precursors that are particularly carbon-intensive and exposed to carbon leakage risks, including:
- Cement
- Iron and steel
- Aluminium
- Fertilisers
- Electricity
- Hydrogen
Once fully phased in, CBAM is expected to cover more than 50% of emissions in sectors regulated under the EU ETS.
Why the CBAM was introduced
Climate change is a global challenge that requires coordinated international action. As the European Union strengthens its climate policies, differences in environmental regulations across countries can lead to carbon leakage.
Carbon leakage occurs when production shifts outside the EU to countries with less stringent climate policies, or when EU products are replaced by more carbon-intensive imports.
The CBAM addresses this risk by ensuring that:
- Imported goods face a carbon cost equivalent to EU-produced goods;
- The EU’s climate objectives and industrial competitiveness are safeguarded.
The mechanism has been designed to be compatible with World Trade Organization (WTO) rules.
National Competent Authorities and CBAM registry access
Access to the CBAM Registry must be requested through the National Competent Authority (NCA) of the EU Member State where the importer is established.
The European Commission has published operational guidelines, sector-specific information, and a list of NCAs to support importers and public authorities in the implementation of CBAM.
Support for developing countries
The European Union is committed to supporting developing countries and Least Developed Countries (LDCs) in adapting to CBAM requirements. This includes technical assistance, guidance on emissions reporting, and support for the transition towards greener industries and renewable energy sources.
Latest CBAM developments
In recent years, the European Commission has adopted additional measures to strengthen CBAM, prevent circumvention, simplify procedures and improve emissions calculation methodologies. These updates aim to ensure the effective implementation of the mechanism across all EU Member States from 2026 onwards.