CBAM Exporter Pack

What is CBAM? A plain-language explainer and glossary

The EU Carbon Border Adjustment Mechanism in five minutes: what it charges, who pays, how the cost is worked out, and 31 terms exporters meet, each linked to a free tool.

Checked against the EU rules on 7 October 2026.

CBAM, the Carbon Border Adjustment Mechanism, is the EU's charge on the carbon emitted when certain imported goods were made. Since 1 January 2026 an EU company importing iron and steel, aluminium, cement, fertilisers, hydrogen or electricity must buy CBAM certificates for those emissions. EU producers already pay for their own emissions under the EU Emissions Trading System; CBAM puts imports on the same footing.

Who pays

The legal duty sits with the EU importer, through an authorised CBAM declarant. An exporter outside the EU has no obligation under EU law, but the cost comes back in price talks, and buyers ask suppliers for emissions data that lowers it. See who pays CBAM.

How the cost is worked out

  • Take the embedded emissions of the goods: your verified figure, or the EU default value with its mark-up.
  • Deduct the free allocation adjustment, a share of the EU benchmark that falls from 97.5% in 2026 to zero in 2034.
  • Multiply what is left by the tonnes imported: that is the number of certificates.
  • Multiply by the certificate price. The cost calculator does all of this for any product and country.

Glossary

CBAM (Carbon Border Adjustment Mechanism)
The EU charge on the emissions embedded in imported carbon-intensive goods, set by Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083. It aims to stop production moving to countries with laxer climate rules (carbon leakage).
CBAM goods
The goods listed in Annex I of the regulation by CN code: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity, plus some precursors and simple products made from them. Check your codes.
CN code
The EU's eight-digit Combined Nomenclature code for a product. Its first six digits are the international HS code. CBAM coverage and default values are set per CN code. Default values by code.
Embedded emissions
The greenhouse gases released in making a product, including those of the precursors that went into it, in tonnes of CO2 equivalent (t CO2e).
Direct emissions
Emissions from the production processes and the fuels burned at the installation. For iron, steel, aluminium and hydrogen only direct emissions count.
Indirect emissions
Emissions from producing the electricity used. Under CBAM they count for cement and fertilisers, not for iron, steel, aluminium or hydrogen.
Specific embedded emissions (SEE)
Embedded emissions per tonne of product, in t CO2e/t. This is the figure EU buyers ask suppliers for, per CN code and installation. Estimate yours.
Precursor
A material that is itself a CBAM good and goes into another, such as wire rod into wire or bolts, or unwrought aluminium into sheet. Its embedded emissions are added to the final product's figure.
Installation and operator
The installation is the plant where goods are made; the operator runs it. Emissions are monitored, verified and reported per installation.
Production route
The technology used to make a product, such as blast furnace or electric arc furnace for steel. Emissions differ widely between routes.
Default value
The emissions figure the Commission publishes per CN code and country of origin, used when no verified actual figure is available. Defaults are set from the more carbon-intensive producers. Look up a default.
Mark-up
The surcharge on default values: 10% in 2026, 20% in 2027 and 30% from 2028. It makes verified actual data the cheaper route for most producers.
Actual emissions
Emissions calculated from the installation's own monitoring data under the EU method. They replace the default only once an accredited verifier has checked them. Default or actual?
Monitoring plan
The operator's documented method for measuring fuels, materials and production at the installation. The verifier checks the emissions against it. Draft one free.
Verification and accredited verifier
An independent check of the installation's emissions, done by a verifier accredited for CBAM by an EU or EEA national accreditation body. It ends in a verification report and normally includes a site visit. Finding a verifier.
Authorised CBAM declarant
The person in the EU, usually the importer or its indirect customs representative, authorised to import CBAM goods, file the declaration and surrender certificates.
CBAM certificate
One certificate covers one tonne of CO2e of embedded emissions. Declarants buy them on a common central platform and surrender them with the annual declaration. Sales start on 1 February 2027.
Certificate price
For 2026 imports, the quarterly average of EU ETS auction prices; from 2027, a weekly average. The Commission publishes it. Official prices.
EU ETS
The EU Emissions Trading System, under which EU producers buy allowances for their emissions. CBAM certificate prices follow its auction prices.
Free allocation adjustment
A deduction reflecting the free ETS allowances EU producers still receive: 97.5% of the EU benchmark in 2026, falling year by year to zero in 2034. It is why the cost per tonne rises even at a steady price. Year-by-year table.
CBAM declaration
The declarant's annual return of imported goods, their embedded emissions and the certificates surrendered. The first, for 2026 imports, is due by 30 September 2027; later ones by 30 September of the following year. Deadline planner.
CBAM Registry
The Commission's IT system where declarants hold accounts, file declarations and surrender certificates, and where accredited verifiers and non-EU operators are registered.
O3CI portal
The CBAM Registry portal for operators of installations outside the EU. A producer enters its installation and verified emissions once and shares them with its EU buyers. Register step by step.
EORI number
The EU customs identifier of a company. In O3CI a producer shares data with a buyer by the buyer's EORI number, so ask each buyer for it.
Communication template
The Commission's Excel file for passing installation and emissions data from producer to importer. Many buyers send it to their suppliers. Check a filled template.
50-tonne threshold
Importers bringing in 50 tonnes or less of CBAM goods a year in total are exempt (electricity and hydrogen are excluded from this exemption). The threshold is the importer's total from all suppliers.
Carbon price paid
A carbon price actually paid in the country of production, which can reduce the certificates the declarant must surrender (Article 9). The detailed rules were still a draft in October 2026. How it would work.
Circumvention
Changing trade patterns only to avoid CBAM, such as slightly modifying goods to move them to an uncovered code, or splitting imports to stay under 50 tonnes. Where the line is.
Transitional and definitive period
From 1 October 2023 to 31 December 2025 importers only reported emissions. The definitive period, with a financial obligation, started on 1 January 2026.
2028 extension
The Commission's December 2025 proposal to add downstream steel and aluminium products, such as fasteners and other steel and aluminium articles, from 2028. Council and Parliament want different lists; it is not yet law. Compare the three lists.
UK CBAM
Britain's own carbon border tax, starting 1 January 2027, with a £50,000 import threshold and a rate set each quarter. It is separate from the EU CBAM. UK CBAM guide.

Free tools for each step

Sources: Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083; the Commission's CBAM pages. Not legal advice.

General information for planning, not legal, tax or customs advice. See the disclaimer.