CBAM explained: what the EU regulation requires from importers

The Carbon Border Adjustment Mechanism (CBAM) is EU law. It was established by Regulation (EU) 2023/956 and later simplified and amended by Regulation (EU) 2025/2083, often referred to as the CBAM "Omnibus" changes. This article gives a high-level overview for importers. It is not legal advice — the official texts and your national competent authority are the authority on what applies to your business.

What CBAM is for

CBAM puts a carbon price on the emissions embedded in certain goods imported into the EU, mirroring the carbon price that EU producers pay under the EU Emissions Trading System (EU ETS). The stated aim is to prevent carbon leakage — production and emissions moving outside the EU — and to align the carbon cost of imported goods with goods produced in the EU.

Which goods and which importers

CBAM covers goods listed in Annex I of the regulation. The sectors are cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, identified by CN code. The obligation falls on the importer of those goods into the EU customs territory. It is a regulatory obligation, not a voluntary sustainability report — and it does not apply to every importer: if you do not import Annex I goods, or you stay under the threshold described below, the mechanism does not bite in the same way.

Since the definitive phase, importing CBAM goods requires the status of authorised CBAM declarant, applied for through the national competent authority. In Finland that is Finnish Customs (Tulli).

Transitional phase vs definitive phase

Transitional phase (1 October 2023 – 31 December 2025). Importers reported the embedded emissions of CBAM goods in quarterly CBAM reports. No certificates had to be purchased and no financial adjustment was paid. The purpose was to collect data and let importers and third-country producers set up their processes.
Definitive phase (from 1 January 2026). The financial mechanism applies. Importers declare the embedded emissions of the goods imported during a calendar year in an annual CBAM declaration and surrender the corresponding number of CBAM certificates.

The annual declaration

The annual CBAM declaration covers the previous calendar year's imports: the quantities of goods, their embedded emissions (direct and, for some sectors, indirect), any carbon price already paid in the country of origin, and the certificates surrendered. Under the amended timetable, the declaration for a given year is due by 30 September of the following year — the first one, covering 2026 imports, by 30 September 2027. The declaration is submitted in the EU's CBAM Registry by the authorised declarant.

Embedded emissions are determined either from actual data from the producing installation or from default values published by the European Commission. Actual data must meet the regulation's monitoring and verification requirements.

Certificates and the phase-in

A CBAM certificate corresponds to one tonne of CO2-equivalent of embedded emissions. Certificate prices follow EU ETS allowance prices. Sales of certificates on the EU's central platform are scheduled to start on 1 February 2027 for emissions embedded in 2026 imports.

The number of certificates to surrender is phased in as free allocation under the EU ETS is phased out between 2026 and 2034: only a small share of embedded emissions requires certificates in 2026, rising step by step to 100 % by 2034. A carbon price effectively paid in the country of origin can be deducted.

The 50-tonne threshold

The 2025 amendment replaced the earlier per-consignment value threshold with a mass-based threshold: an importer whose cumulative imports of CBAM goods stay at or below 50 tonnes net mass per calendar year is exempt from the main obligations for those goods. The threshold does not apply to electricity and hydrogen — any quantity of those brings CBAM obligations. An importer who exceeds 50 tonnes during the year must hold authorised declarant status and file for the whole year, so tracking cumulative mass matters.

What this means in practice

Whatever your position, CBAM is a data obligation first: which CN codes, how many tonnes, from which countries and installations, with what emissions, and whether a carbon price was already paid. Those records need to exist for the whole calendar year before the declaration can be prepared. The CBAM tool exists to keep that data in one place; the tool prepares the declaration data and you submit the declaration to the EU CBAM registry yourself.

Always check the current official texts and Commission guidance linked below. Implementing regulations set details such as default values and verification rules and are updated over time.

Sources

This article describes how the CBAM tool works in general terms and is not legal advice. The tool prepares the declaration data; you submit the declaration to the EU CBAM registry yourself.