Carbon Border Adjustment Mechanism
Since October 1st 2023, the Carbon Border Adjustment Mechanism (CBAM) has been phased in. The CBAM is a European regulation that the EU uses to correct carbon emissions released from the production of certain goods outside the EU at the border.
The CBAM is an instrument introduced by the European Commission. The CBAM aims to ensure fair competition between European companies and companies outside the EU. In doing so, the CBAM supports the operation of the European Emissions Trading Scheme (EU ETS).
Anyone importing CBAM goods with a value above €150 per shipment into the EU has been required to report how much CO2 was emitted in the production of those goods since October 2023. From January 1st 2026, registered importers must start paying a price for the CO2 emitted in the production of the imported CBAM goods.
Importers wishing to import CBAM goods from January 1st 2026 must be authorised as a CBAM declarant. Authorisation should be sought from the competent authority in the country of establishment. In addition, importers of CBAM goods must purchase CO2 certificates from 1 January 2026 to correct the CO2 emitted in the production of the imported goods. As many CO2 certificates must be handed in annually as CO2 was emitted in the production of the imported CBAM goods. 1 certificate thereby equals the emission of 1 tonne of CO2.