cbam explained
What is CBAM?
The EU Carbon Border Adjustment Mechanism puts a carbon price on the emissions embedded in certain goods imported into the EU, so those goods carry a carbon cost comparable to goods produced inside the EU under the EU Emissions Trading System.
It is not a tariff and not a tax. It works through certificates that importers buy and surrender against the emissions embedded in what they bring in.
CBAM has been in its definitive phase since 1 January 2026. Financial obligations are already accruing.
Last reviewed: 8 August 2026
The 60-second version
- CBAM puts a carbon price on the emissions embedded in certain imports. Not a tax nor a tariff, certificates.
- Live since 1 January 2026. Liability is accruing now; it is settled in 2027.
- Applies to steel, aluminium, cement, fertiliser, hydrogen and electricity. The scope is set by CN code, not by sector intuition.
- Under 50 tonnes a year across steel, aluminium, fertiliser and cement, you are exempt for that year. Electricity and hydrogen have no threshold.
- First declaration and certificate surrender: 30 September 2027, covering 2026 imports.
For more details, read below.
From source evidence to a review-ready CBAM position.
The most important gap that catches importers out: Liability builds on every shipment from 1 January 2026, but there is no financial obligation to EU until 2027.
Transitional phase. Quarterly reporting only, no payments.
Definitive phase begins. Authorisation required. Liability starts accruing.
Every in-scope import made this year carries a cost that will be settled in 2027.
CBAM certificate sales open. First purchases become possible.
First annual CBAM declaration due, covering 2026 imports — and the certificates for those imports must be surrendered by the same date.
Does CBAM apply to you?
What you import
CBAM currently covers six sectors: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen plus certain precursors and downstream products within them.
The trap: scope is defined by CN code, not by sector only, and it does not include only raw material. Whether a product is in scope is settled by the CN codes listed in Annex I of Regulation (EU) 2023/956.
How much you import
A single mass-based threshold of 50 tonnes per importer per calendar year applies to the cumulative net mass of everything you import across iron and steel, aluminium, fertilisers and cement combined.
Stay under it for the year and you are exempt for that year.
Two exceptions: electricity and hydrogen have no threshold at all. Import any quantity and you are in scope.
Who you are
The obligation sits with the EU-established importer for goods that are imported from suppliers outside the EU.
The 50 tonnes is not an allowance. If you cross the threshold part-way through the year, every in-scope tonne you imported that year becomes liable including everything below the first 50 tonnes. Cumulative mass is worth tracking before you reach it, not after.
What an in-scope importer has to do
Become an authorized CBAM declarant
Authorisation is granted by the national competent authority in your Member State and is required before you cross the threshold. The 31 March 2026 window that allowed importers to keep trading while their application was assessed has closed. National authorities have up to 120 days to decide.
Without it, customs has no legal basis to release covered goods for free circulation.
Report embedded emissions
Declare the emissions embedded in each import, using verified supplier data from the producing installation or, where permitted, official default values. Actual values require verification by an accredited verifier.
Unverifiable figures fall back to default values, which cost more.
Buy and surrender certificates
One certificate covers one tonne of CO₂e. Purchases open 1 February 2027; the certificates covering 2026 imports must be surrendered by 30 September 2027. Repurchase requests for excess certificates are due by 31 October, and following Regulation (EU) 2025/2083 the repurchase limit is aligned with the purchase obligation rather than the old one-third cap. Certificates bought in 2027 for 2026 imports may only be repurchased in 2027. Certificates neither surrendered nor repurchased are cancelled on 1 November without compensation.
Penalties are harmonised with the EU ETS excess-emissions regime at €100 per tonne of embedded emissions, and paying the penalty does not remove the obligation to surrender the outstanding certificates.
Hold certificates each quarter
From 2027, at the end of each quarter you must hold certificates covering at least 50% of the embedded emissions in everything you have imported since 1 January that year. Quarter-ends are 31 March, 30 June, 30 September and 31 December.
This is a cash-flow obligation, not a filing one.
Keep the evidence
Records supporting the emissions calculations, including the verifier’s report, must be kept until the end of the fourth year after the year in which the CBAM declaration was, or should have been, submitted (Article 7(6) of Regulation (EU) 2023/956).
Evidence you cannot produce is evidence you did not have.
What it costs, and what moves the number
The certificate price is set by the European Commission from EU ETS auction clearing prices – quarterly through 2026, weekly from 2027. The first two official prices were €75.36/tCO₂e for Q1 2026 and €75.28/tCO₂e for Q2 2026.
For 2026 imports the applicable price is the quarterly average for the quarter in which the goods were imported, not the quarter in which you buy the certificates. Import dates through 2026 therefore have to be tracked to know which price applies when you buy in 2027.
Your certificate count is then reduced by the free allocation adjustment, which mirrors the free allowances an equivalent EU producer would still receive, and by any carbon price you have already paid in the country of production, where you can evidence it.
The default figure is the published 2026 value for that CN code and country, including the mark-up that applies to default values this year. The mark-up is 10% in 2026, 20% in 2027 and 30% from 2028 for iron and steel, aluminium, cement and hydrogen. Fertilisers carry a 1% mark-up throughout. The supplier figure is illustrative only. There is an aluminium example on the landing page.
Free allocation and any carbon price already paid reduce both columns. What they do not change is the gap between them and that gap is a function of one thing: whether you can produce verified emissions data from your supplier’s installation.
Illustrative only. Not a quotation, an estimate of your liability, or advice. Certificate prices change each quarter and your own figures depend on your suppliers, production routes and countries of origin.
What this means depending on your responsibilities.
ceo
This is a cost-of-goods problem, not a paperwork problem. It changes the landed cost of every covered import and, over time, the relative economics of your supplier base. The phase-in continues through 2034, when free allocation ends entirely.
cfo
Liability accrues now and settles in 2027. It is an accruing obligation against 2026 imports with a known price per quarter and a payment date you can plan for provided someone is tracking the tonnage and the emissions data as the year runs.
in house compliance / accountant
One annual declaration per calendar year, due 30 September of the following year, plus certificate surrender by the same date. Everything in it has to trace back to source evidence, kept until the end of the fourth year after the year of submission.
customs broker / indirect customs representative
Read Card 3 above again. If you act as an indirect customs representative for a non-EU importer, you must hold authorised CBAM declarant status yourself, and the declaration, surrender and penalty exposure sit with you. Authorised declarants may delegate filing to an EU-established third party holding an EORI number but the declarant remains responsible.
Proposed – not yet law
What may change next
In December 2025 the European Commission proposed extending CBAM to a wider set of downstream products containing significant quantities of iron, steel or aluminium, together with anti-circumvention measures and a temporary fund for EU producers of CBAM goods.
The Council agreed its position in June 2026 and the European Parliament’s lead committee set out its position in July 2026, with a plenary vote expected in September 2026. Until that process concludes, none of it is law and none of it changes what is in scope today.
If adopted, it would pull in importers who are entirely outside CBAM as it stands.
where EvoRep fits
Know your position before the deadline sets it.
EvoRep organises import and supplier evidence, calculates the developing CBAM position at the official certificate price, surfaces what is missing, and keeps every figure linked to its source document.
EvoRep prepares the position and preserves the evidence. Your authorised team reviews, approves and submits.
Not ready for a call? Send us one invoice and we’ll tell you if you’re in scope and roughly what it costs for. Free
faq
Common questions.
Is CBAM a tax or a tariff?
Neither. It is a certificate-based mechanism. You buy certificates matching the emissions embedded in your imports and surrender them annually, so imported goods carry a carbon cost comparable to EU-produced equivalents.
Does the 50-tonne threshold reset every year?
Yes. It is assessed per importer per calendar year, on cumulative net mass across iron and steel, aluminium, fertilisers and cement. Electricity and hydrogen are not subject to it at all.
Can I use default values instead of chasing my suppliers?
Where they are available and legally applicable, yes. The mark-up is 10% in 2026, 20% in 2027 and 30% from 2028 for iron and steel, aluminium, cement and hydrogen. Fertilisers carry a 1% mark-up throughout. So for most sectors the convenience of using them has a price that increases each year.
Can someone else file for me?
An authorised CBAM declarant may delegate submission to a third party established in a Member State and holding an EORI number. Responsibility for the declaration stays with the declarant.
What if my supplier doesnt provide emissions data?
You fall back to the applicable official default value where one exists, and pay the mark-up. This is the most common reason a CBAM position costs more than it needs to.