What is CBAM
CBAM stands for Carbon Border Adjustment Mechanism. It’s a policy tool proposed by the European Union to prevent companies from relocating to areas with lower environmental standards to avoid carbon costs.
CBAM puts a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries.
Are you affected?
Under CBAM, EU importers are obligated to acquire accurate carbon emissions data reflecting the factory setup (including installations and processes) and calculate data according to the calculation method established by the EU.
Starting January 2026, only approved CBAM declarants can import goods affected by CBAM rules. Initially, CBAM applies to Cement, Electricity, Fertilizers, Iron and Steel, Aluminum and Hydrogen. Your company must apply for this status. Once approved, you’ll need to regularly report the emissions from your imports. To calculate these, you must know the emissions released during production. Based on these emissions, importers need to purchase and report CBAM certificates.
I'm an EU importer. What should I do?
Confirm you have signed up and are an approved CBAM declarant.
Clarify the exact emission data of all your non-EU suppliers and the sub-suppliers of their suppliers*.
Calculate the total quantity of CBAM goods imported within the reporting period.
Clarify the specific variables related to direct and indirect emissions.
Gather the carbon price due in the country of origin for the embedded emissions.
Submit your CBAM report to the local authority and buy certificates to compensate the carbon emission.
Track your consumption and be sure to file a request with the EU if you anticipate overages.
I'm a non-EU importer. What should I do?
Obtain a Importer of record (IOR) based in the EU.
Clarify the exact emission data of all your non-EU suppliers and the sub-suppliers of their suppliers*.
Calculate the total quantity of CBAM goods imported within the reporting period.
Clarify the specific variables related to direct and indirect emissions.
Gather the carbon price due in the country of origin for the embedded emissions.
Submit your CBAM report to the local authority and buy certificates to compensate the carbon emission.
Track your consumption and be sure to file a request with the EU if you anticipate overages.
I'm a direct representative. What should I do?
Confirm you have signed up and are an approved CBAM declarant.
Clarify the exact emission data of all your non-EU suppliers and the sub-suppliers of their suppliers*.
Calculate the total quantity of CBAM goods imported within the reporting period.
Clarify the specific variables related to direct and indirect emissions.
Gather the carbon price due in the country of origin for the embedded emissions.
Submit your CBAM report to the local authority and buy certificates to compensate the carbon emission.
I'm an indirect representative. What should I do?
Understand your risks and obligations. (*They aren't the same as customs IR obligations)
Confirm you have signed up and are an approved CBAM declarant.
Clarify the exact emission data of all your clients non-EU suppliers and the sub-suppliers*.
Calculate the total quantity of CBAM goods imported within the reporting period.
Clarify the specific variables related to direct and indirect emissions.
Gather the carbon price due in the country of origin for the embedded emissions.
Submit your CBAM report to the local authority and buy certificates to compensate the carbon emission.
Track your consumption and be sure to file a request with the EU if you anticipate overages.
Grace helps you acquire the skills and knowledge you need to navigate CBAM with confidence. Schedule a free call to explore your situation and see how we can help.
