The Carbon Border Adjustment Mechanism (CBAM) is the EU's tool to put a fair price on carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries.
CBAM will apply in its definitive regime from 2026, with a transitional phase of 2023 to 2025. This gradual introduction is aligned with the phase-out of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry.
Latest developments
The European Commission has announced plans to introduce a new measure to address the risk of carbon leakage for EU-produced goods produced in CBAM sectors.
Public consultation on the scope extension to specific downstream products, anti-circumvention measures and rules for the electricity sector.
The European Commission welcomes the provisional political agreement reached between the European Parliament and the Council today on the Commission proposal to simplify and strengthen the EU's carbon border adjustment mechanism (CBAM).
The Commission is pleased to announce that the Implementing Regulation as regards the authorisation of CBAM declarants was adopted by the Commission on 17 March 2025 and is published on the Commission website. This will allow importers and indirect customs representatives to apply for the status of authorised CBAM declarant to be able to import CBAM goods from 1 January 2026.
The European Commission has adopted a new package of proposals to simplify EU rules, boost competitiveness, and unlock additional investment capacity. This is a major step forward in creating a more favourable business environment to help EU companies grow, innovate, and create quality jobs.
These first ‘Omnibus' packages of 26 February 2025 bring together proposals in a number of related legislative fields, covering a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence, EU Taxonomy, carbon border adjustment mechanism, and European investment programmes.
Why CBAM?
Climate change is a global problem that needs global solutions. As the EU raises its own climate ambition, and as long as less stringent climate policies prevail in many non-EU countries, there is a risk of so-called ‘carbon leakage'.
Carbon leakage occurs when companies based in the EU move carbon-intensive production abroad to countries where less stringent climate policies are in place than in the EU, or when EU products get replaced by more carbon-intensive imports.
CBAM is a system to confirm that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU. This ensures that:
- the carbon price of imports is equivalent to the carbon price of domestic production;
- the EU's climate objectives are not undermined.
CBAM is designed to be compatible with WTO rules.
CBAM definitive regime (from 2026)
EU importers of goods covered by CBAM will register with national authorities where they can also buy CBAM certificates. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in €/tonne of CO2 emitted.
EU importers will declare the emissions embedded in their imports and surrender the corresponding number of certificates each year.
If importers can prove that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted.
CBAM transitional phase (2023 – 2025)
On 1 October 2023, the CBAM entered into application in its transitional phase, with the first reporting period for importers ending 31 January 2024. The gradual phasing in of CBAM allows for a careful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities.
CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon-intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen.
With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. The objective of the transitional period is to serve as a pilot and learning period for all stakeholders (importers, producers and authorities) and to collect useful information on embedded emissions to refine the methodology for the definitive period.
During this period, importers of goods in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without the need to buy and surrender certificates.
Indirect emissions will be covered in the scope after the transitional period for some sectors (cement and fertilisers), based on a defined methodology outlined in the Implementing Regulation published on 17 August 2023 and its accompanying guidance.
The Implementing Regulation on reporting requirements and methodology provides for some flexibility when it comes to the values used to calculate embedded emissions on imports during the transitional phase.
Until the end of 2024, companies will have the choice of reporting in three ways:
- full reporting according to the new methodology (EU method);
- reporting based on an equivalent method (three options);
- reporting based on default reference values (only until July 2024).
As of 1 January 2025, a new portal section of the CBAM Registry allows installation operators outside the EU to upload and share their installations and emissions data with reporting declarants in a streamlined manner, instead of submitting it to each declarant separately.
From early 2025, CBAM declarants can to apply for the ‘authorised CBAM declarant’ status via the CBAM Registry. Their application is processed by the National Competent Authority of the EU Member State where they are established. This status will become mandatory as of 1 January 2026 for the import of CBAM goods in the EU customs territory.
The Commission will open the application process for authorisations as soon as the dedicated implementing act is adopted (planned for March 2025). The Commission will then also make detailed guidance available.
CBAM does not apply to electricity generated in the exclusive economic zone (EEZ) of Member States and imported into the EU. Such electricity has “EU origin” and is thus not covered by Art. 2(1) of the CBAM Regulation. Hence, such electricity is not subject to reporting obligations during the transitional period and will not be subject to an adjustment under the CBAM rules as from 2026.
Find more information in our FAQ (Question 95). In that context, there is no obligation, regarding such electricity imports, to apply for the status of authorised CBAM declarant, nor to access the CBAM Registry.”
A review of the CBAM's functioning during its transitional phase will be concluded before the entry into force of the definitive system. At the same time, the product scope will be reviewed to assess the feasibility of including other goods produced in sectors covered by the EU ETS in the scope of the CBAM mechanism, such as certain downstream products and those identified as suitable candidates during negotiations. The report will include a timetable setting out their inclusion by 2030.
Sectoral information
The Commission organised a series of online webinars, covering general features of the CBAM as well as the specifics of each sector (iron & steel, aluminium, cement, fertilisers, electricity and hydrogen).
National Competent Authorities
Restricted Access
e-learning module specific for National Competent Authorities
NCA Contacts
Access to the Transitional CBAM registry should be requested through the National Competent Authority (NCA) of the EU country in which the importer is established.
Support for developing countries
The European Union is committed to supporting developing countries and Least Developed Countries (LDCs) in implementing the CBAM, greening their industries, and transitioning to renewable energy sources. The EU is also committed to help those countries interested in introducing or enhancing their carbon pricing systems. The following document provides an overview of guidance and technical support offered by the EU as well as of programmes supporting the green transition in developing countries and LDCs.
More information
Information on the CBAM registry and reporting requirements for importers and installation operators.
Guidance on implementing CBAM, information on the self-assessment tool and other relevant information for the various stakeholders involved.
Information specific to each of the 6 sectors under CBAM: cement, aluminium, fertilisers, iron and steel, hydrogen and electricity.