The European Union’s Carbon Border Adjustment Mechanism (CBAM) is now in force, marking a significant step in the EU’s climate policy. Designed to curb emissions linked to the import of carbon-intensive products, CBAM aims to create a level playing field for EU producers by pricing embedded CO₂ emissions at the border. Below, we break down the key aspects of the regulation, giving a brief guideline about what to do and what it means in practice for companies importing covered goods.
The purpose of the Carbon Border Adjustment Mechanism (CBAM) is to prevent carbon leakage, a phenomenon where companies shift production to countries with less stringent climate policies. By placing a carbon price on imported goods that matches the cost faced by EU producers under the EU Emissions Trading System (ETS), CBAM ensures that imported products reflect their actual carbon footprint. This levels the playing field for European industries, encourages more sustainableproduction practices abroad and supports the EU’s broader goal of reaching climate neutrality by 2050. Over time, CBAM is expected to incentivize global partners to adopt low-carbon technologies, making sustainable production the new global standard.
The CBAM applies to carbon emissions from specific products imported into the EU that are considered at high risk of carbon leakage. At present, this includes:
The European Union has also indicated that the scope of the regulation may be broadened in the future, potentially covering additional goods as climate policy develops.
There are, however, specific exemptions to the CBAM obligations. Companies importing less than 50 tons of CBAM-covered goods per year may qualify for the so-called minor threshold exemption. To benefit from this exemption, businesses should carefully forecast their annual import volumes and ensure timely registration as a CBAM declarant, if needed. It’s important to note that this 50-ton threshold also applies to the importers of indirect customs representatives. For imports of hydrogen and electricity, the 50 ton thresholds does not apply. In addition, goods originating in the EU and later re-imported, as well as items cleared as returned goods, are excluded from CBAM coverage.
To ease the compliance burden, particularly for small and medium-sized enterprises, the European Commission introduced a CBAM Simplification Package in early 2025 (COM(2025) 87 final), subject to final adoption and implementation by Member States. This package reduces administrative complexity, simplifies emissions reporting and certificate procedures and introduces clearer financial calculations. These updates aim to maintain the environmental integrity of CBAM while making the system more predictable and manageable for companies affected by the regulation.
The introduction took place in two phases:
From the entry into force of the final CBAM scheme in 2026, EU importers will purchase CBAM certificates corresponding to the carbon price that would have been paid if the goods had been produced under EU carbon pricing rules.
Starting 2027, the price of the certificates will be calculated based on the average quarterly auction price of the EU ETS, expressed in euros/tons of CO2 emitted. First prices will be published on 7 April 2026.
It should be noted that if a non-EU producer has already paid a carbon price in a third country for the emissions embedded in the production of the imported goods, the corresponding cost can be fully deducted from the CBAM obligation. This is not yet the case, which is why it is unclear how this will work in practice for businesses.
Importers must apply to become authorized CBAM declarants via the EU-wide CBAM registry, managed by the European Commission. Once approved by the competent authority of the relevant Member State, they receive secure access to the registry, which they use to submit CBAM declarations, manage certificates and monitor their compliance.
The application in the CBAM registry must take place by end of March 2026. Importers – or indirect customs representatives, where applicable – are responsible for initiating this process. The competent authority evaluates the application and grants access to the registry. Once authorized, they are subject to annual reporting and verification obligations under the CBAM rules.
Starting in 2026, CBAM declarants must report the total quantity of CBAM goods imported during the previous calendar year, by May 31 of each year. This report must include the embedded greenhouse gas (GHG) emissions, calculated using the EU’s mandatory methodology. They must also surrender a corresponding number of CBAM certificates to cover those emissions.
Under the CBAM Regulation, different parties may be responsible for submitting emissions data. This includes the importer established in an EU Member State, an indirect customs representative acting on behalf of a non-EU-based importer or an authorized person in line with customs legislation. Authorized CBAM declarants may also delegate reporting tasks to third parties. While actual emissions must be independently verified, emissions based on default values provided by the EU do not require third-party verification. This simplifies the process in many cases, but also makes it more expensive due to the high default values
For companies that source materials and products from outside the EU, the CBAM introduces new layers of complexity in customs, data tracking and supplier coordination. Importers now need to collect verified emissions data from suppliers, ensure that calculations follow the EU methodology and align reporting deadlines with internal systems. Logistics professionals can support these efforts by providing transparent supply chain data, ensuring compliance with customs procedures and managing regulatory risks.
Meeting the requirements of the CBAM regulation calls for early planning, accurate forecasting and close collaboration between logistics providers, customs agents and procurement teams. Importers should:
Logistics professionals such as Rhenus play a crucial role in helping businesses adapt by offering data visibility, compliance support and cross-border expertise.
With the CBAM now fully in force, importers must meet strict requirements around emissions reporting, registration and certificate management. While the mechanism supports the EU’s climate goals and ensures fair competition, it also introduces significant compliance challenges. By planning ahead and working with experienced logistics providers like Rhenus, companies can navigate CBAM effectively and maintain uninterrupted trade.
Our specialists in EU import regulations and customs management are ready to support your commercial transactions.
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