The Carbon Border Adjustment Mechanism, or CBAM, requires EU importers to report and manage the embedded emissions of specific carbon-intensive goods imported into the EU.
Since 1 January 2026, CBAM has moved into its definitive regime. This means importers need to manage authorised declarant status, annual declarations and CBAM certificate obligations.
Chapter 2
CBAM's general principles
CBAM certificates are linked to the EU ETS allowance price. In 2026, the price is calculated as a quarterly average. From 2027 onward, it is calculated as a weekly average. If a carbon price has already been paid in the country of production, the corresponding amount may be deducted. (source: EU ETS - EC)
Regulated sectors
CBAM currently applies to specific goods and selected precursors in the following sectors:
During the transitional phase, importers reported embedded emissions for covered goods without having to buy or surrender CBAM certificates.
Definitive Regime (2026 onward)
From 2026 onward, CBAM becomes a financial compliance obligation. EU importers, or their indirect customs representatives, importing more than 50 tonnes of CBAM goods into the EU must apply for authorised CBAM declarant status and manage CBAM certificate obligations.
Chapter 3
Purpose & history
Chapter 4
Who is affected?
Historically, the EU addressed carbon leakage through free allocations under its Emissions Trading System (ETS). This approach was transitional and limited in scope, as it did not incentivize non-EU producers to adopt cleaner technologies.
CBAM represents a more comprehensive solution by imposing a carbon price on imported goods based on their embedded emissions.
CBAM has implications for multiple groups of stakeholders:
EU importers: From 2026 onward, companies importing goods will need to purchase certificates based on their imports' embedded emissions.
Non-EU exporters: Producers outside the EU must provide detailed data on their production processes and emissions intensity.
Global supply chains: CBAM encourages greater transparency across supply chains as businesses are incentivized to track emissions data rigorously.
For businesses operating in regulated sectors, compliance with CBAM means adapting operations to meet reporting requirements and bearing additional costs associated with purchasing certificates.
Chapter 5
The CBAM timeline
The transitional phase
The transitional period (October 2023–December 2025) allowed businesses time to prepare for implementation in 2026 when financial obligations begin. It also provides an opportunity for stakeholders to familiarize with reporting systems and compliance requirements.
During this phase:
Importers must submit quarterly reports detailing embedded emissions in their goods without financial penalties.
A centralized CBAM registry has been established for reporting purposes.
Methodologies for calculating embedded emissions are being refined to ensure accuracy and consistency across sectors.
The definitive phase
From 1 January 2026, importers above the 50-tonne threshold need a CBAM account number or application reference number. Companies that still need authorised CBAM declarant status should apply as soon as possible.
January 1, 2026
Definitive Phase begins with financial obligations
Importers must register as authorized CBAM declarants
February 1, 2027
EU central certificate platform opens for CBAM certificate trading
September 30, 2027
First annual CBAM declaration and certificate surrender deadline
Mandatory certificate purchases begin (minimum 50% of year-to-date emissions)
Chapter 6
A CBAM software solution
CBAM requires more than a yearly report. Companies need to connect import data, supplier information, emissions calculations, internal responsibilities and supporting documentation in one reliable workflow.
100% Coverage
Improved supply chain coverage
100% Compliance
Streamlined CBAM compliance
100% Automation
Collection, calculations and reporting
With MasterSustainability.today, companies can:
identify CBAM-covered goods and suppliers
collect emissions data through supplier portals
structure product, import and emissions data
calculate embedded emissions
track missing or incomplete supplier data
prepare CBAM reports and annual declarations
maintain audit-ready documentation
gain visibility into future certificate exposure
What our customers are saying
Join these companies in achieving compliance
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This guide not only provides insights into a digital CBAM solution, but also presents an integrated ESG suite designed to outperform industry standards.
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