Climate & nature
Regulation (EU) 2023/956
CBAM
Carbon Border Adjustment Mechanism
If you import carbon-heavy goods like steel or cement into the EU, you start paying a carbon price similar to what EU factories already pay.
Does this hit me?
You do not file anything. Some imported goods could get slightly more expensive as carbon is priced in. The point is cleaner industry, not a consumer form.
Check in the wizardPick a country in the header to see who enforces this at home. Union text is not the last word for directives.
Next switch-on: already in force · 1 Jan 2026 — CBAM certificates — definitive period
How it rolls in
Oct 2023
Transitional reporting began.
2026
Financial adjustment begins.
2034
Free ETS allowances for CBAM sectors should be gone.
Why it exists
Without it, dirty production would simply move abroad (carbon leakage) while EU plants paid for emissions. CBAM levels the border.
What actually changes
- Importers of iron, steel, aluminium, cement, fertilisers, electricity, and hydrogen must report embedded emissions.
- From 2026 they buy CBAM certificates mirroring the EU ETS price, with free allowances phasing down.
- Default values apply if real data is missing — usually not in the importer's favour.
How it hits you
You do not file anything. Some imported goods could get slightly more expensive as carbon is priced in. The point is cleaner industry, not a consumer form.
For citizens
What this does to everyday life
Rights, bills, and what you can ignore. You are usually not the one who files — companies and states are.
You do not file carbon certificates
Importers of steel, cement, aluminium, fertiliser, electricity and hydrogen do. You feel it, if at all, in the price of buildings, cars, and food that uses those inputs.
Why bother
EU factories already pay for carbon. Without a border adjustment, dirty production would simply move. The citizen impact is climate policy that does not punish only EU plants.
Rights you actually get
- None as a private shopper — this is a customs/climate instrument.
Costs and trade-offs
- Indirect: slightly higher prices for carbon-heavy goods as certificates start in 2026.
What you can do
- Treat 'made cheaper because carbon was free abroad' with suspicion. That is the leakage CBAM tries to close.
What you can ignore
- You do not register as a CBAM declarant to buy a washing machine.
If something goes wrong
Not a citizen procedure. Climate and consumer groups watch the price pass-through.
More citizen notes across files: For people
Heard this? Not quite.
Claim: It is a tariff on all imports.
It covers a short list of carbon-heavy basic goods and tracks the EU carbon price — not a blanket customs duty.
Latest official statements
All EU NewsParliament · 15 Sept 2026, 10:43
Press release - Strengthening the EU carbon border adjustment mechanism and closing loopholes
Board one-pager
Board one-pager
Who this is for: EU manufacturers, energy and importers. Regulation (EU) 2023/956. already in force · 1 Jan 2026.
Scope
- You import iron/steel, aluminium, cement, fertilisers, electricity, or hydrogen (and certain downstream steel/aluminium) into the EU.
First 90 days
- This week: List CN codes you import against the CBAM goods list.
- This month: Register / authorise the declarant and pick the reporting tool.
- This quarter: Ask mills for actual embedded emissions; agree a data format.
Penalties: Incorrect or missing reports can bring penalties; from 2026, failing to surrender certificates is the expensive failure.
For companies
How to stay on the right side of this file
Practical order of work, not a substitute for counsel. Importers of listed basic goods into the EU customs territory.
You are probably
In if you import iron/steel, aluminium, cement, fertiliser, electricity or hydrogen into the EU.
Effort
Registration is a project. Plant-level data is the recurring cost.
Budget
Certificates track EU ETS prices. Admin is a customs + climate hire, not a PDF.
Roles in this file
The same company can wear more than one hat. Classify before you buy a tool.
Importer / authorised declarant
You bring listed goods over the border.
Authorisation, installation-level data, certificate purchase, national customs window.
Non-EU producer
You sell those goods into the Union.
Verified emissions to your EU buyer. Silence pushes them onto default values — and onto you in the next negotiation.
Are you in scope?
Act now- You import iron/steel, aluminium, cement, fertilisers, electricity, or hydrogen (and certain downstream steel/aluminium) into the EU.
Usually not, if
- Importers of finished consumer goods that are not on the CBAM list.
- De minimis consignment thresholds — check current customs guidance, do not guess.
First moves
- This weekList CN codes you import against the CBAM goods list.Trade compliance
- This monthRegister / authorise the declarant and pick the reporting tool.Customs
- This quarterAsk mills for actual embedded emissions; agree a data format.Procurement
- If you import small volumes of steel parts, confirm whether you are the importer of record. Freight forwarders are not a strategy.
If you skip this
- Goods stuck at the border.
- Default values that wipe the margin.
- No authorised declarant when the definitive period is already on.
Done looks like
- Named declarant.
- A plant file per installation.
- A certificate process that finance can book.
Keep this evidence
- Import listings.
- Emissions data or default-value justification.
- Certificate purchase records from 2026.
- Authorisation.
Ask vendors
- Can you provide verified embedded-emissions data at the installation level?
Where programmes usually break
- Waiting for 2026 while the transitional reports are already the rehearsal.
Call counsel when
- Inward processing, mixed goods, electricity contracts, or a group with many EORI numbers.
Enforcement
Incorrect or missing reports can bring penalties; from 2026, failing to surrender certificates is the expensive failure.
National CBAM authority / customs; Commission runs the registry.
Need a stack, not one file? Open the company desk
Professional briefing
Legal architecture and duties
For counsel, compliance, and policy teams. Not advice. The Official Journal still wins.
- Instrument
- Regulation
- Legal basis
- Arts 192(1) and 207 TFEU · Regulation (EU) 2023/956
- Application
- Transitional reporting 1 October 2023 – 31 December 2025 (no certificates). Definitive regime from 1 January 2026: authorised CBAM declarant, certificates, annual declaration. Free-allocation phase-down on the ETS side runs in parallel through the 2030s.
A carbon border adjustment on specified embedded emissions in iron and steel, aluminium, cement, fertilisers, electricity and hydrogen (and some downstream products). It is a customs and climate instrument, not a consumer tax. The importer (authorised CBAM declarant) is the duty-holder. Indirect costs pass into construction, automotive, and food. Default values punish poor data.
How the file is built
Transitional vs definitive
Until end-2025: quarterly reports. From 2026: buy and surrender CBAM certificates mirroring the ETS price, minus carbon price paid in origin (if proven) and minus the free-allocation factor.
Goods
CN codes in Annex I. Watch downstream extensions (screws, some fabricated steel). Mis-classification is a customs error with climate consequences.
Emissions
Direct emissions always; indirect (electricity) for some goods. Installation-level data from non-EU producers, verified.
Operators
| Role | Who | Core duties |
|---|---|---|
| Authorised CBAM declarant | Importer established in the EU (or indirect customs representative in specified cases). | Authorisation, registry account, annual declaration, certificate surrender, records. |
| Non-EU installation operator | Producer of covered goods. | Monitor and share embedded-emissions data; get verification. No EU filing of their own. |
| National competent authority | Authorises declarants; Commission runs the registry and methodology. | Checks, penalties for under-declaration. |
Scope
Import into the EU customs territory. Exports from the EU are an ETS problem, not CBAM. Goods originating in countries fully linked to the ETS may be exempted (e.g. specified EEA/CH arrangements — read the annex, do not guess).
In
- Listed CN codes: cement, iron/steel, aluminium, fertilisers, electricity, hydrogen, and listed downstream.
- Embedded direct (and where required indirect) emissions.
- Inward processing and specific customs procedures have special rules — specialists needed.
Out, or narrower than assumed
- De minimis consignment threshold (small value) — do not run a business on it.
- Goods of origin in fully exempted jurisdictions if listed.
- Non-listed finished products (a car is not a CBAM good; its steel inputs were, at import of the steel).
Operative provisions
| Anchor | Rule | What it does in practice |
|---|---|---|
| Art 5–17 | Authorisation as CBAM declarant; financial and operational criteria. | Importers who cannot get authorised cannot import covered goods as planned. |
| Art 6 / 10–11 | Annual declaration of embedded emissions; verification; default values if data missing. | Supplier data programmes must start before 2026, not in the filing week. |
| Certificates | Buy at ETS-linked price; surrender against declared emissions, with deductions. | Treasury and trade need a joint position on carbon as a variable import cost. |
Secondary law and guidance
- Implementing regulations on reporting, verification, and default values.
- Commission guidance and CBAM registry manuals.
- National competent-authority practice on authorisation.
National layer. Customs authorities plus a designated CBAM competent authority. Penalties for failure to report in the transitional phase were already national; definitive-regime penalties are in the Regulation with national collection.
How it sits with other files
Enforcement and private rights
Who
National CBAM authorities and customs; Commission registry.
Tools
Refusal of authorisation, default values (economic penalty), fines, customs blocking in extreme cases.
Private rights
Little direct consumer standing. Contractual disputes with non-EU suppliers over data quality will be the private fight.
Risk register
| Risk | Signal | Control |
|---|---|---|
| Default values | Suppliers will not share installation data | Contractual data clauses; dual-source; model the default-value P&L now. |
| Wrong CN code | Downstream steel parts not flagged in the customs master | Master-data review against Annex I with customs broker. |
| No authorised declarant | Import via a freight forwarder who will not take the role | Decide in-house vs indirect representative before 2026 volumes. |
Open issues
- Quality of non-EU verification and recognition of foreign carbon prices.
- WTO litigation risk (political; the legal design tries to mirror the ETS).
- Possible extension of product list in reviews.
Primary sources
A carbon price at the border on listed basic goods. Households do not file. Importers and their customs desk do.
You feel it now
Definitive period from 1 January 2026: certificates, not only reports.
Next
Coverage may widen later. Do not staff only the current six sectors as if they were eternal.
Where it lands
| Channel | People | Companies |
|---|---|---|
| Prices | Steel-heavy goods (cars, cans, buildings) can move in price. You do not hold certificates. | Certificate cost plus the admin of plant-level emissions. Default values are the expensive fallback. |
| Trade desk | No form. | Authorised CBAM declarant is an operations role. Reporting-only ended with the definitive period in 2026. |
Who gains
EU producers facing a carbon price at home; importers who already have plant data.
Who pays
Traders who hoped default values would stay cheap.
Files this pulls with it
- CSRD — Emissions in the value chain show up in both files.
- EU Taxonomy — Transition capex stories need numbers that survive CBAM as well.
Who pays
Importers of covered goods, passed through to buyers of those materials.
Who benefits
EU producers already under ETS; climate goals if leakage falls.
Read the official text