CBAM 2026: what the carbon tariff is and how it affects your business

CBAM entered its definitive phase on 1 January 2026. From that date, importing steel, aluminium, cement, fertilisers, hydrogen or electricity into the European Union no longer means just reporting emissions: it means paying for them. The Carbon Border Adjustment Mechanism (CBAM) is now a real financial obligation for thousands of importing companies.

This guide explains what CBAM is, how the definitive phase works, who is required to comply after the 2025 simplification (with its 50-tonne threshold) and how rigorous management of your carbon footprint directly reduces the cost you pay.

What is CBAM and why does it exist?

CBAM is the EU instrument for putting a price on the carbon embedded in the production of emissions-intensive goods that enter the European market from third countries. It is governed by Regulation (EU) 2023/956 and developed by the simplification Regulation (EU) 2025/2083, published in October 2025.

European industry already pays for its emissions through the EU Emissions Trading System (EU ETS). A manufacturer outside the EU did not bear that cost, creating two distortions: unfair competition for European producers and an incentive to relocate production to countries with laxer climate rules, the phenomenon known as carbon leakage. CBAM was created within the Fit for 55 package to correct that asymmetry and extend the carbon price to imports.

From the transitional phase to the definitive phase

CBAM was introduced in two stages:

• October 2023 to December 2025 (transitional phase): importers only reported the embedded emissions, with no payment. A learning period for companies and authorities.
• From 1 January 2026 (definitive phase): the financial obligations begin. Authorised importers must purchase CBAM certificates for the tonnes of embedded CO₂ in the goods they bring into the EU.

The 2025 simplification reset the operational calendar. The key dates are worth keeping clear:

Milestone	Date
Start of the definitive phase (real obligations)	1 January 2026
Deadline to apply for authorised declarant status and keep importing provisionally	31 March 2026
Start of CBAM certificate sales	1 February 2027
First annual declaration and surrender of certificates (2026 imports)	30 September 2027
End of free allowance allocation and CBAM fully in force	2034

Which sectors does CBAM affect?

In its initial phase, CBAM covers six sectors with high carbon intensity:

• Iron and steel (including downstream products such as fasteners or prefabricated structures)
• Aluminium
• Cement
• Fertilisers
• Hydrogen
• Electricity

These sectors account for a very high share of the industrial emissions covered by the EU ETS. The European Commission is mandated to review and widen the scope, so sectors such as plastics or chemicals could be added in the coming years. The 2025 simplification also adjusted the calculation: for steel, iron and aluminium, the emissions of precursors are counted by default, but no longer those of finishing processes, in line with the EU ETS rules.

How does the mechanism work?

1. Measure the embedded emissions

For each imported good, the CO₂ emitted during its production in the country of origin is calculated. If the supplier does not provide an emissions report, the European Commission's default values apply, which are conservative and assign more emissions than the real data.

2. Declare and buy certificates

Authorised declarants must declare the embedded emissions annually and acquire the corresponding CBAM certificates. Their price reflects the EU ETS price: in 2026 it is set quarterly as the average of the auctions; from 2027, more frequently. In addition, at the end of each quarter importers must hold certificates covering at least 50% of the year's accumulated emissions (down from the 80% originally planned), which eases cash-flow pressure.

3. Deduct the carbon price already paid

If the supplier has already paid a carbon price in its own country, that amount is deducted from the CBAM cost. This encourages exporting countries to develop their own carbon pricing systems.

Who is required to comply? The 50-tonne threshold

The headline change of the 2025 simplification is a single threshold of 50 tonnes per year. Anyone importing less than 50 tonnes of CBAM goods a year (across all sectors, except electricity and hydrogen, which fall outside this exemption) is fully exempt: no authorisation, no declaration, no certificate purchase. According to the Commission, this threshold exempts around 90% of importers while still covering roughly 99% of embedded emissions.

If you exceed 50 tonnes, you must apply for authorised CBAM declarant status. In Spain, the competent authority is the Tax Agency (AEAT). Anyone who submits the application before 31 March 2026 can keep importing provisionally while it is processed.

The real cost: an illustrative example

The cost depends on the product, its embedded emissions and the price of the European emission allowance, which is variable. The basic formula is:

CBAM cost = Imported tonnes × Embedded emissions (tCO₂/t product) × ETS price (€/tCO₂) − carbon price already paid at origin

This cost will keep rising as the free allocation of allowances to European installations is withdrawn, a gradual process running until it disappears in 2034, when CBAM will be fully in force.

Why measuring your emissions well saves you money

CBAM has a direct consequence for any company that imports carbon-intensive materials: if you do not obtain verified data from your suppliers, you will pay on default values, which are always higher than reality. The more precise your carbon footprint data, the lower your CBAM cost.

Moreover, reducing your carbon footprint brings direct economic benefits beyond CBAM: lower operating costs, a stronger position with investors and clients, and greater resilience to future regulation. The key is managing Scope 3 and supplier data well, which is exactly where most of the embedded emissions that CBAM prices originate.

CBAM in the European regulatory context

CBAM does not act alone. It is part of an expanding ecosystem that includes the CSRD, Spain's Royal Decree 214/2025 on the carbon-footprint registry, the EU Taxonomy Regulation and the new Industrial Acceleration Act. Companies that already work on their carbon footprint systematically start with an advantage in responding to CBAM, because much of the information they need is already in their management platform.

If your company imports goods subject to CBAM, accurately calculating your product and supply-chain carbon footprint is the first step to not overpaying.