What is CBAM?

CBAM (Carbon Border Adjustment Mechanism) is a mechanism for carbon adjustment at the EU’s borders. The mechanism ensures additional taxation of imports of carbon-intensive goods in the form of mandatory purchase of CBAM certificates. The EU aims to ensure equal treatment of carbon-intensive goods regardless of where they are produced. The ultimate goal of CBAM is the decarbonization of the EU and its economic partners.

How does CBAM work?

From January 2026, importers will be required to purchase a corresponding number of CBAM certificates for importing carbon-intensive goods. The number of certificates will depend on:

1. The quantity of imported goods
2. The amount of emissions generated during the production of goods in a third country
3. Any environmental taxes already paid in the third country.

What are carbon-intensive goods?

• Cement
• Electricity
• Fertilizers
• Iron and steel
• Aluminium
• Hydrogen

Who is responsible for CBAM reporting?

The entity responsible for CBAM reporting is typically the importer of goods who releases the goods for free circulation within the EU. For EU-based importers, the role of the responsible entity can also be taken by a customs representative (freight forwarder). An importer can also authorize a third party, such as an advising company, for CBAM reporting. For importers from third countries, the customs representative (freight forwarder) is responsible for CBAM reporting.

Transitional and definitive phase

Transitional phase (October 1, 2023 to December 31, 2025):

• Aimed at learning, coordinating all involved parties, and adapting legislation.
• Quarterly reporting of emissions without financial consequences for importers.

Definitive phase (from January 1, 2026 onwards):

• Gradual phasing out of free allowances under the EU ETS.
• Annual reporting of emissions and mandatory submission of CBAM certificates.