CBAM transitional phase begins. EU importers of covered goods must submit quarterly reports on embedded greenhouse gas emissions. No certificate purchases required during this phase.
Carbon Border Adjustment Mechanism (CBAM)
The EU Carbon Border Adjustment Mechanism (CBAM) requires any company importing over 50 tonnes of cement, iron and steel, aluminum, fertilizers, electricity, or hydrogen into the EU per year to register as an authorized CBAM declarant, annually report verified embedded greenhouse gas emissions, and surrender CBAM certificates priced against EU Emissions Trading System (EU ETS) allowances, with a penalty of €100 per tonne of CO₂e for authorized declarants who fail to surrender certificates on time.
Next Deadline
September 30, 2027: authorized CBAM declarants must file the first annual CBAM declaration and surrender certificates for all covered goods imported during 2026.
The 2026 reporting year is already in progress. Authorized CBAM declarants must verify and declare embedded emissions for all goods imported between January 1 and December 31, 2026 by September 30, 2027. CBAM certificate prices for 2026 imports are set as quarterly averages of EU ETS allowance auction prices. Certificates go on sale in February 2027. Companies that have not yet obtained authorized CBAM declarant status cannot import covered goods above the 50-tonne annual threshold until the National Competent Authority (NCA) grants authorization.
Regulation timeline
What the regulation requires
The Carbon Border Adjustment Mechanism (Regulation EU 2023/956, amended by Regulation EU 2025/2083) entered its definitive phase on January 1, 2026, following a transitional reporting period from October 2023 to December 2025. It applies to EU importers and indirect customs representatives acting on their behalf, importing covered goods into the EU: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.
Importers below 50 tonnes per year across all in-scope goods combined are exempt from CBAM obligations. Electricity and hydrogen are assessed separately and are not subject to the same threshold.
The regulation requires importers to hold authorized CBAM declarant status, report verified greenhouse gas emissions (direct and, for some sectors, indirect) embedded in imported goods, purchase CBAM certificates equivalent to those emissions, and annually surrender them. If a carbon price has already been paid in the country of origin, the declarant can deduct the corresponding amount.
The mechanism prevents carbon leakage by ensuring that the carbon cost of imports matches the cost borne by EU producers under the EU ETS, with free allowances for EU producers phasing out between 2026 and 2034.
Common CBAM implementation challenges
Non-EU suppliers rarely hold emissions data in the format CBAM requires
CBAM compliance depends on access to reliable emissions data from non-EU suppliers. Importers must calculate embedded emissions for each imported good and production site and support those calculations with verified production-level data.
Non-EU suppliers operate outside CBAM's regulatory scope and carry no obligation to provide emissions data in the format the regulation requires. Emissions reporting processes and methodological standards are not uniform across production regions, and verification readiness cannot be assumed.
Authorization, declaration, and certificate surrender each require a separate workflow
The definitive phase establishes three connected obligations: authorization, annual declaration, and certificate surrender. Each carries its own workflow, registry interaction, and timing requirements.
The quarterly certificate holding requirement is 50% of embedded emissions accrued since the start of the calendar year. Preparing and submitting the annual declaration and certificate surrender requires coordinated input from procurement, trade compliance, and finance.
Certificate cost exposure moves with EU ETS allowance prices
CBAM certificate prices move with EU ETS allowance prices. For 2026 imports, certificate prices reflect a quarterly average of EU ETS auction prices.
From 2027, certificate prices reflect weekly EU ETS averages. Importers must forecast certificate cost exposure, account for carbon costs already paid in the country of origin, and plan purchases before the September 30 annual surrender deadline.
CBAM may extend to selected downstream products from 2028
In December 2025, the European Commission submitted a legislative proposal to extend CBAM coverage to selected downstream products. The proposal is subject to legislative negotiation and has not yet been adopted.
If adopted, the extension would bring additional product categories into CBAM scope. The scope of those categories and the 2028 implementation date remain subject to change as legislative negotiation continues.
Manage every CBAM obligation in one platform
The osapiens HUB for CBAM covers compliance workflow, embedded emissions calculation, annual declaration preparation, and CBAM report generation for submission to the EU CBAM declarant portal. The platform gives procurement and finance teams visibility into carbon cost exposure and enables supplier benchmarking across product categories.
Collect verified production-level emissions data through the osapiens Supplier Portal
Suppliers access a free, multilingual portal with built-in e-Learning modules that guide them through the EU's emissions calculation methodology. Reminder workflows and customizable email templates automatically handle supplier follow-up.
Where verified supplier data is unavailable, importers must use EU default values. These are intentionally set conservatively and may result in higher CBAM obligations than calculations based on verified production data.
Calculate embedded emissions and generate CBAM reports in the required XML format
The platform calculates embedded emissions per CN code and import declaration, applies the relevant adjustment factor for free allowances, and deducts carbon prices already paid in the country of origin. The CBAM report is generated in the XML format required for upload to the EU CBAM declarant portal.
The full calculation basis, data sources, and validation steps are preserved as audit-ready documentation.
Forecast certificate costs against EU ETS prices and benchmark supplier emissions
The platform gives procurement and finance teams real-time visibility into projected CBAM certificate costs, updated with EU ETS price movements and directly linked to each import. Finance teams can plan certificate purchases ahead of the September 30 surrender deadline.
Built-in supplier benchmarking enables importers to compare embedded emissions performance across suppliers for the same product category and identify lower-emission sourcing options.
Connect CBAM emissions data to product and corporate carbon programs
Supplier master data, product catalog, production site information, and the Supplier Portal used for CBAM are available across the osapiens Carbon Management Suite. The structured emissions data collected for CBAM covers the supplier, product, and production site relationships that Product Carbon Footprint and Corporate Carbon Footprint programs require.
Companies managing all three obligations on a shared data layer avoid running separate supplier data collection processes for each reporting requirement.
ADDITIONAL CBAM RESOURCES
Frequently asked questions
CBAM applies to EU importers and indirect customs representatives acting on their behalf, who import more than 50 tonnes per year of covered goods: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. Importers calculate the 50-tonne threshold across all in-scope goods combined, except electricity and hydrogen, which are assessed separately.
If imports exceed the threshold at any point during the year, CBAM obligations apply retroactively to all imports of covered goods from the beginning of that calendar year. Companies below the threshold are fully exempt from CBAM reporting, authorization, and certificate-surrender obligations.
Only authorized CBAM declarants may import covered goods above the 50-tonne annual threshold. The National Competent Authority (NCA) of the EU country in which the importer is established grants authorization.
The March 31, 2026 deadline for submitting applications while continuing provisional imports has passed. Importers who have not yet obtained authorization and exceed the threshold face import restrictions and non-compliance penalties.
Applications to initiate or reinstate authorized CBAM declarant status must be submitted directly to the NCA.
Authorized CBAM declarants who fail to surrender the required certificates by the September 30 annual deadline face a penalty of €100 per tonne of CO₂e of unsurrendered emissions. This figure is set by Article 26(1) of Regulation EU 2023/956, harmonized with Article 16(3) of EU ETS Directive 2003/87/EC.
Importers who bring covered goods into the EU without holding authorized CBAM declarant status face a penalty of three to five times that figure per tonne, depending on the duration, gravity, and intentional nature of non-compliance (Article 26(2) of Regulation EU 2023/956).
A penalty does not release the declarant from the obligation to surrender the outstanding certificates. The National Competent Authority of the relevant Member State enforces CBAM penalties.
Embedded emissions are the greenhouse gases emitted during the production of covered goods, up to the point of import into the EU. Direct emissions from production processes apply across all covered goods; for cement and fertilizers, indirect emissions from electricity generation are also in scope.
Importers may use actual verified emissions data provided by the non-EU producer, or EU default values published by the European Commission where verified data is unavailable. The European Commission conservatively sets default values, meaning their use may result in higher certificate obligations than calculations based on verified production data.
Where a carbon price has been paid in the country of origin, the declarant can deduct the corresponding amount from the certificate obligation.
The embedded emissions data collected for CBAM, broken down by product, production site, and production method, covers the Scope 3 Category 1 (purchased goods and services) inputs required under corporate greenhouse gas accounting frameworks. The same data feeds product-level carbon footprint calculations.
On the osapiens HUB, embedded emissions collected for CBAM automatically flow into the Corporate Carbon Management and Product Carbon Management modules. Companies managing all three obligations on a shared data layer avoid running separate supplier data collection processes for each reporting requirement.
An in-house approach requires integrating import declaration data, supplier emissions data, EU ETS price feeds, and registry submissions into a workflow that meets the EU's calculation methodology and XML reporting format.
The osapiens HUB for CBAM provides this workflow as a configured platform, with legally validated calculation logic, a guided supplier portal available in 29 languages, and report export in the format required by the EU CBAM declarant portal.
If CBAM scope expands to include additional product categories, the platform reflects updated obligations without requiring a new implementation.
