Frequently askedquestions about CBAM.

CBAM is the EU’s Carbon Border Adjustment Mechanism. The policy aims to ensure that goods imported into the EU carry a carbon cost equivalent to what an EU producer would have paid under the EU Emissions Trading System. It exists to prevent carbon leakage — the practice of relocating production of carbon intensive goods to countries with weaker or no carbon pricing to avoid the cost of cleaner domestic production.

If you are an EU-based business importing iron and steel, aluminium, cement, fertilisers, hydrogen, or electricity from outside the EU, and your annual imports exceed 50 tonnes, CBAM applies to you. Applicability is determined by the CN code of the goods declared at customs, not the general product label.

You must register as an authorised declarant through the CBAM Registry, collect verified emissions data from your suppliers if you wish to use actual values, and submit an annual CBAM declaration covering all in-scope imports. From February 2027 you must also purchase and surrender CBAM certificates to cover your embedded emissions liability. At the end of each quarter, you will need to hold enough certificates to cover 50% of the emissions embedded in your imports since the beginning of the calendar year.

Actual values are installation-specific emissions figures provided by your supplier and verified by an accredited third party. Default values are conservative emission levels set by the European Commission that apply when actual data is unavailable or unverified. Default values are deliberately high — using them instead of verified actual data can increase your CBAM cost significantly.

You need installation-level data showing the specific embedded emissions of the goods you are importing, expressed in tCO₂e per tonne of product.

For complex goods that use other CBAM-covered materials as inputs, you will also need verified emissions data for those upstream precursor materials.

In addition, your supplier must provide a process-specific embedded free allocation (SEFA) figure — this represents the free allocation that would be granted to equivalent EU production through this particular production route, and is deducted from your CBAM liability.

All of this data must be verified by an accredited third-party verifier before it can be used in your CBAM declaration.

Not automatically. CBAM uses a bespoke methodology that does not map directly onto the GHG Protocol or product carbon footprinting standards. A supplier with a Scope 1 and 2 inventory or an existing product carbon footprint may have a useful starting point, but their data will need to be recalculated and verified specifically against CBAM methodological requirements before it can be used. Importantly, a supplier needs to produce a detailed monitoring plan in order to successfully pass verification in 2027.

Your cost is based on the emissions embedded in your imports above a product-specific benchmark, multiplied by a phase-in rate and the current CBAM certificate price. Carbon prices already paid in the country of production can be deducted. The formula is:

(Embedded emissions − Benchmark × Phase-in rate) × CBAM certificate price − Carbon price paid abroad = CBAM cost in EUR / tonne

Your first annual declaration, covering imports made in 2026, is due by 30 September 2027. If you fail to surrender sufficient certificates, the penalty is €100 per tonne of CO₂ equivalent not covered on top of, not instead of, the obligation to surrender the missing certificates. Importing without authorised declarant status can result in additional sanctions in each EU country.

Yes. The European Commission confirmed in December 2025 that CBAM will extend to approximately 180 additional downstream steel and aluminium product categories, including machinery, industrial equipment, and certain household goods, with expansion targeted for 2028. Further extensions to other sectors are under review.