EU Carbon Border Adjustment Mechanism (CBAM) has moved to the definitive regime

The Carbon Border Adjustment Mechanism (EU) 2023/956 has been operating under the definitive regime as of 1 January 2026. The transition period was based only on reporting; in the definitive regime, authorisation, verification and financial obligation are added alongside reporting.

The difference from the exporter's perspective can be summarised as follows: previously, the data declared by the importer was taken as the basis, but now that data must undergo independent verification. Unverified data does not produce a usable document on the importer's side.

To import products within scope into the EU customs territory, the status of "authorised CBAM declarant" is required. Those importing above the mass-based threshold of 50 tonnes must apply for this status.

Declarations are submitted annually: the first CBAM declaration for 2026 is due by 30 September 2027. CBAM certificates corresponding to the embedded emissions reported in the declaration are surrendered annually; certificate sales begin via the common central platform on 1 February 2027.

This calendar structure means that data produced throughout 2026 will be used in 2027. In other words, if the measurement and record-keeping system is not set up today, next year's declaration will find no data to rely on.

A manufacturer selling covered products to the EU must calculate its product's embedded emissions at facility level and pass this on to its importer. Although relying on default values is possible, this generally produces a higher obligation than actual data.

The calculation begins with correctly drawing the facility's boundaries: which processes are included, which inputs are counted as indirect emissions, and which emission factor is used to assess electricity. If these decisions are changed later, comparability with the previous period is lost.

Data being ready for independent verification requires a separate level of maturity: measurement points must be defined, records traceable, and the calculation method documented. The verifier wants to see the record behind the table, not the table itself.

The EU operates an emissions trading system that imposes a carbon cost on its own industry. The side effect is this: products from countries without a carbon cost gain a price advantage, and production shifts to those countries. Since the emissions continue outside the EU, there is no climate gain.

The carbon border adjustment mechanism was established to prevent this shift: it imposes a cost on the imported product's embedded emissions equivalent to what an EU producer pays. The aim is not to restrict imports but to close the cost gap.

This is why the mechanism is NOT a product safety or conformity regime: it is not concerned with the product's technical characteristics but with the emission intensity of the production process. Conformity-file logic does not apply here.

The mechanism's real job is not calculation but DATA COLLECTION. What the importer must report is the product's embedded emissions, and this data comes from the production facility: how much energy and raw material were used in which process, what source the electricity came from, and which intermediate products were used in production.

The point where the chain breaks is usually the supplier's side: if the producer outside the EU does not keep or share this data, the importer falls back on default values, and default values typically work against actual data.

This is why the preparation work is commercial, not technical: adding a data-sharing clause to supplier contracts, defining the data format upfront, and requiring verifiable records. When this is not done, the mechanism's cost rises unnecessarily.

The obligation is concentrated on the party importing into the EU; the producer outside the EU is not directly addressed but becomes commercially disadvantaged if it fails to supply the data.

Scope is concentrated in certain sectors and progresses by expanding; whether a product is in scope is determined via its customs tariff heading. This requires looking at tariff classification, not the product's name.

It is essential for data to be verifiable: recording the calculation method, data source and assumptions is the only basis for defensibility in a later audit.