What is CBAM? The EU carbon border adjustment explained (2026)

Last reviewed 4 November 2026

The Carbon Border Adjustment Mechanism (CBAM) puts a carbon price on certain goods imported into the EU, so that they pay the same carbon cost as goods made inside the EU under the EU Emissions Trading System (EU ETS). Reporting started in October 2023; since 1 January 2026 importers pay.

Purpose

EU producers of steel, cement, aluminium and fertilisers pay for their emissions through the EU ETS. Without an adjustment at the border, production could move to countries with weaker climate policies (“carbon leakage”), and imports would undercut EU producers. CBAM charges the importer for the emissions embedded in the imported goods, at the EU ETS price. In parallel, the free EU ETS allowances that EU producers still receive are phased out between 2026 and 2034, and CBAM phases in at the same pace.

Which goods are covered

Sector	Main products	CN codes
Cement	Cement clinker, Portland and other hydraulic cements, calcined clay	2523, 2507 00 80
Iron and steel	Pig iron, semi-finished products, flat and long products, tubes, structures, screws and bolts	most of 72, much of 73, 2601 12 00
Aluminium	Unwrought aluminium, bars, profiles, wire, plates, foil, tubes, structures	7601–7614, 7616
Fertilisers	Nitric acid, ammonia, nitrogen and mixed fertilisers	2808, 2814, 2834 21, 3102, 3105
Hydrogen	Hydrogen	2804 10 00
Electricity	Electrical energy	2716

The full list with benchmark values is on the CBAM benchmarks pages. Goods from Iceland, Liechtenstein, Norway and Switzerland are excluded because those countries apply the EU ETS or a linked system. A proposal to add around 180 downstream steel and aluminium products from 2028 is in negotiation (see downstream extension).

Who has obligations

The obligations fall on the authorised CBAM declarant: the importer established in an EU Member State, or the indirect customs representative acting for it. Non-EU producers have no direct obligation, but their EU customers need emissions data from them, and verified actual data is usually cheaper than the default values.

Since 2026 there is a 50-tonne de minimis threshold: an importer that brings in no more than 50 tonnes of CBAM goods (net mass, cumulative over a calendar year, excluding hydrogen and electricity) has no CBAM obligations. The Commission estimates this exempts around 90 % of importers while still covering about 99 % of embedded emissions. Check your position with the threshold checker.

How the payment works

Import CBAM goods as an authorised declarant (status needed before the import that crosses 50 t).
Collect embedded emissions per product: verified actual data from the installation, or the official default values.
Buy CBAM certificates on the common central platform (sales open 1 February 2027).
Submit the annual CBAM declaration and surrender certificates by 30 September of the following year. For 2026 imports the deadline is 30 September 2027.

The number of certificates equals the embedded emissions minus the free allocation adjustment, minus any carbon price effectively paid in the country of origin. In 2026 the adjustment removes 97.5 % of benchmark-level emissions, which is why the real cost in the first years is driven mostly by how far the product’s emissions exceed the benchmark. The price for 2026 imports is set per quarter: 2026 Q1 €75.36, 2026 Q2 €75.28, 2026 Q3 €82.32.

Try it with real numbers in the CBAM cost calculator.

Timeline

Date	Milestone
Oct 2023 – Dec 2025	Transitional period: quarterly reports only, no payment.
1 Jan 2026	Definitive period. Authorisation required above 50 t; default values carry a 10 % mark-up.
1 Feb 2027	Certificate sales open. From 2027, quarterly holding of at least 50 % of the year’s expected obligation.
30 Sep 2027	First annual declaration and surrender, for 2026 imports.
2028	Default value mark-up rises to 30 %. Proposed extension to downstream goods.
2034	Free allocation for CBAM sectors ends; embedded emissions are priced in full.

Sources