The transitional grace period is over. Since 1 January 2026 the EU’s Carbon Border Adjustment Mechanism (CBAM) has been in its definitive phase. If your European company imports iron and steel, aluminium, cement, fertilisers, electricity or hydrogen from outside the EU, carbon emissions are no longer just a reporting metric. They are a direct line-item expense.
The first bill arrives in 2027, but it is being written now: every tonne imported during 2026 counts towards it. This update explains how the financial phase works, what it demands of importers and their suppliers, and why it becomes a routine process once the rules are understood.
From reporting to paying
CBAM ran in a transitional phase from 1 October 2023 to 31 December 2025. Importers filed quarterly reports on the emissions embedded in their goods, and nothing was paid. The definitive phase replaces those quarterly reports with an annual declaration and, critically, a financial obligation: one CBAM certificate must be surrendered for each tonne of CO₂e embedded in the goods imported.
The policy logic is simple. EU producers of steel, cement or aluminium pay for their emissions under the EU Emissions Trading System (EU ETS). CBAM applies an equivalent carbon price at the border, so that goods made elsewhere compete on the same terms and production does not simply relocate to places with weaker climate rules.
What the financial phase means for importers
1. Direct financial costs
Importers must buy CBAM certificates to cover the embedded emissions of their goods. The price is tied to the EU ETS: for goods imported in 2026, certificates are priced at the quarterly average of EU ETS auction prices, moving to weekly averages from 2027. This removes the financial advantage of sourcing cheaper, high-carbon goods from producers who do not pay for their emissions.
2. Supply chain transparency
Embedded emissions can be reported from actual, installation-level data supplied by the non-EU manufacturer, or from default values published by the Commission. Default values are deliberately conservative and include a mark-up, so relying on them usually means paying for more emissions than the goods actually carry. Verified actual data from your suppliers is what turns CBAM from a cost you absorb into a cost you can manage.
3. Legal restrictions on sourcing
CBAM goods can no longer be cleared through customs by an ordinary importer. Above the threshold, importing them requires the status of Authorised CBAM Declarant. Without it, goods will not clear the EU border.
How the cost is actually calculated
The certificate bill is less mysterious than it first appears. It rests on four inputs:
- Import volume: the tonnes of each CBAM good you imported in the year, by CN code.
- Embedded emissions: tonnes of CO₂e per tonne of product, from verified supplier data or default values. Direct emissions from production are always counted; for some goods, such as cement and fertilisers, indirect emissions from electricity are included too.
- Carbon price already paid: any carbon price effectively paid in the country of production can be deducted.
- Free allocation adjustment: EU producers still receive some free ETS allowances while CBAM phases in, and the importer’s obligation is reduced to match. That reduction shrinks every year until it reaches zero in 2034.
The practical consequence is that the cost for 2026 imports is modest compared with what follows, because only a small share of embedded emissions is chargeable in the first year. The share rises steadily towards 2034. 2026 is therefore the cheapest year in which to build the process, and the most expensive year in which to discover it does not exist.
The timeline
| Date | What happens |
|---|---|
| 1 Oct 2023 – 31 Dec 2025 | Transitional phase: quarterly reports on embedded emissions, no payment |
| October 2025 | CBAM simplification adopted (Regulation (EU) 2025/2083): 50-tonne threshold, later declaration deadline, certificate sales moved to 2027 |
| 1 January 2026 | Definitive phase begins; all 2026 imports above the threshold count towards the first declaration |
| 31 March 2026 | Importers who applied for authorised declarant status by this date could keep importing while their application was processed |
| 1 February 2027 | CBAM certificates go on sale via the central EU platform, covering 2026 imports |
| 30 September 2027 | First annual CBAM declaration due, with certificates surrendered on the same date |
| Each year to 2034 | Free allocation phases out and the chargeable share of embedded emissions rises |
Deadlines of 31 May and 1 July that appear in earlier guidance no longer apply. The simplification moved both the declaration and the surrender to 30 September of the year following import.
Who is exempt
The simplification replaced the old €150-per-consignment exemption with a single mass-based threshold of 50 tonnes of CBAM goods per importer per calendar year. Importers at or below it have no authorisation, declaration or certificate obligations. The Commission expects this to exempt around 90% of importers while keeping about 99% of embedded emissions in scope. Electricity and hydrogen do not benefit from the threshold.
The threshold is cumulative across the year, so it is worth tracking from January rather than discovering in November that you crossed it.
The immediate action plan
Missing certificates at surrender are penalised at the EU ETS excess emissions penalty, €100 per tonne of CO₂e indexed to inflation since 2013, on top of the obligation to still surrender the certificates. Four steps keep a business well clear of that.
Step 1: Secure legal authorisation
- Action: apply for Authorised CBAM Declarant status through the CBAM Registry, via your national competent authority, if you have not already.
- Why: only authorised declarants may import CBAM goods above the threshold into the EU customs territory.
Step 2: Audit and engage suppliers
- Action: screen all non-EU suppliers of covered goods and request installation-specific, verifiable emissions data.
- Why: precise data sets your certificate obligation. Over time, shifting volume towards lower-carbon suppliers reduces future certificate costs directly.
Step 3: Plan financially for carbon
- Action: build CBAM certificate costs into cash-flow forecasting and landed-cost calculations.
- Why: certificate prices move with the EU ETS market, and from 2027 importers must hold certificates covering part of their embedded emissions at the end of each quarter. Carbon belongs on the CFO’s desk.
Step 4: Prepare for 30 September 2027
- Action: set up data pipelines that aggregate 2026 import volumes and supplier emissions now, not next summer.
- Why: the first annual declaration covers the whole of 2026 and must be backed by verified data.
It is simpler than it looks, once you know the rules
CBAM has a reputation for complexity, but most of that comes from doing it for the first time. Structurally, it is a small and repeatable calculation:
| What seems hard | What it actually is |
|---|---|
| “Embedded emissions” | An emissions intensity per tonne of product, calculated with the same monitoring methods used in any installation-level GHG inventory |
| Supplier data | A standard data template, completed once per installation and product, then updated annually |
| Certificate cost | Tonnes imported × emissions per tonne, less carbon price paid and the free allocation adjustment, × the certificate price |
| The annual declaration | A summary of the year’s imports, their embedded emissions and the certificates surrendered, filed once |
Most importers deal with a handful of product codes and a limited number of supplying installations. Once each installation’s data is set up and verified, the second year is largely a matter of updating volumes. The work is concentrated in the first cycle, and that is exactly where expertise saves the most time and money.
How ecorune can help
CBAM sits at the meeting point of two things we do every day: installation-level greenhouse gas accounting and supply chain emissions data. We work on both sides of the border.
For EU importers
- Scoping and exposure: mapping which of your imports fall under CBAM by CN code, testing the 50-tonne threshold, and estimating the certificate cost for 2026 and the years that follow.
- Supplier data programmes: designing the data request, engaging suppliers, and reviewing the emissions data they return for completeness and plausibility before it reaches a verifier.
- Default versus actual: quantifying the difference between default values and actual data, so you know which suppliers are worth the effort first.
- Declaration readiness: assembling import volumes, embedded emissions and supporting evidence into a declaration-ready dataset.
- Sourcing strategy: comparing suppliers on embedded emissions alongside price, so carbon becomes part of procurement decisions.
For non-EU manufacturers and exporters
- Installation-level emissions calculations for CBAM goods, following the EU methodology, with clear boundaries, production routes and precursor emissions.
- Monitoring plans and data systems that make annual updates routine and verification straightforward.
- Verification support: preparing the evidence an accredited verifier will ask for, and closing gaps before the visit.
- Reduction planning: identifying where lower embedded emissions would make your product more competitive for EU buyers.
Our background in ISO 14064-1, the GHG Protocol and product carbon footprints means CBAM data is built on the same foundations as your wider climate reporting, rather than as a separate exercise.
Read next: Organisational GHG Accounting: The Complete Guide, and Revised ESRS Are Final: What Applies From 2027.