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CBAM (Carbon Border Adjustment Mechanism) – what is it?
EU mechanism to prevent carbon leakage by applying CO₂ pricing to imports of carbon-intensive goods, with the following timeline:
Transition phase incl. Omnibus simplifications (2023-2025)
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Reporting obligations in force since October 2023; quarterly reports on imports, emissions, and CO₂ prices that are due in a third country.
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Fines for non-compliance; de-minimis threshold exempts imports ≤50 tons/year.
Definitive period (starting January 2026)
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Only approved CBAM declarants may import CBAM goods (if de-minimis rule is not applicable).
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Annual declarations due by September 30, of the following year; independent third-party validation of declared values required.
Adjustments and expansion (2027–2030)
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Certificate purchase for 2026 CBAM imports starts February 2027.
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CBAM scope may expand to chemicals/polymers by 2030; free allowances under EU Emission Trading System (ETS) phase out by 2034.
Why act now?
Authorized CBAM declarant: status mandatory from 2026 for importation
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Registration open since March 2025 via the EU's Authorization Management Module (AMM).
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Requires i.a., EORI number, portal access, supporting docs; approval may take up to 180 days.
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Failure to register will block imports of covered goods starting January 2026.
Consider costs for certificates in financial planning as they will impact EBITDA
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Companies must budget for CBAM certificates in 2026, even though the issuance begins in February 2027 (retroactive for imports from January 2026).
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CO₂ taxes or carbon pricing mechanisms paid in the country of origin can be deducted from liabilities under CBAM regulation.
Sanctions and Compliance Risks
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Up to €100 per undeclared ton of CO₂ for non-compliance.
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Repeated breaches may result in the loss of CBAM declarant status, effectively halting imports.
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Companies must ensure accurate reporting and timely submission of CBAM declarations to avoid penalties.
Originally published 22 October 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
