EU Carbon Border Adjustment Mechanism (CBAM)

CBAM currently covers six sectors: iron and steel, cement, aluminium, fertilizers, electricity, and hydrogen. The European Commission may expand the scope to other goods at risk of carbon leakage. The specific CN (Combined Nomenclature) codes covered are listed in Annex I of the CBAM Regulation.

During the transitional period (October 2023 to December 2025, now ended), EU importers had to submit quarterly CBAM reports detailing the total quantity of goods imported, their embedded emissions, and any carbon price paid in the country of origin. Reports were due one month after each quarter end. No financial payments were required during this phase.

The definitive phase started on 1 January 2026, but under Regulation (EU) 2025/2083 the first sales of CBAM certificates begin on 1 February 2027 on a common central platform, available to authorised CBAM declarants only. The price of certificates is linked to the EU Emissions Trading System (ETS) allowance price. Declarants must submit an annual CBAM declaration and surrender certificates annually covering the embedded emissions in their imports — by 30 September each year, for the first time in 2027 for the year 2026 — minus any carbon price already paid in the country of origin.

Under Regulation (EU) 2025/2083, CBAM's de minimis is a single mass-based threshold: importers whose cumulative net mass of covered imports stays within 50 tonnes per calendar year are exempt from CBAM obligations. This replaced the former €150-per-consignment value derogation. Additionally, CBAM only applies to goods in the six covered sectors. Most consumer goods sold by e-commerce sellers (electronics, clothing, household items) are not currently covered by CBAM, and typical parcels stay far below the 50-tonne threshold.

Importers of CBAM goods must apply for authorisation as CBAM declarants through the CBAM registry. You need an EORI number and must register with the competent national authority in the EU member state where you are established. If you expect to exceed the 50-tonne single mass-based threshold, you must submit the authorisation application. The registration process includes providing information about your import activities and the covered goods.

Yes, if carbon pricing has been paid in the country where the goods were produced (e.g., a carbon tax or emissions trading system), this can be deducted from the CBAM certificate obligation. You must provide verified evidence of the carbon price paid. This deduction only applies to actual carbon costs, not subsidies or other incentives.