--- description: "The Carbon Border Adjustment Mechanism (CBAM) is the EU's carbon price on imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen." title: "CBAM: Carbon Border Adjustment Mechanism" image: "https://greenfineprint.com/card/regulations/cbam.png?v=wi9y6c" url: "https://greenfineprint.com/regulations/cbam" --- REGULATION (EU) 2023/956 CELEX 32023R0956 In force Change pending definitive period since 1 January 2026 # CBAM Carbon Border Adjustment Mechanism **Change pending.** The Commission has proposed extending CBAM to downstream goods from 1 January 2028; a proposal, not law ## CBAM status track Current stage: 6 of 6 1. **Adopted** 10 May 2023 2. **In force, the day after publication in the Official Journal** 17 May 2023 3. **Applies; transitional period** 1 Oct 2023 4. **Simplification, Regulation (EU) 2025/2083, in force** 20 Oct 2025 5. **Commission proposes extending CBAM to downstream goods, a proposal, not law** 17 Dec 2025 6. **Definitive period** 1 Jan 2026 – now ## Summary and who is affected The Carbon Border Adjustment Mechanism (CBAM) is the EU's carbon price on imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Importers that the 50-tonne yearly exemption doesn't cover buy [CBAM certificates](https://greenfineprint.com/glossary/cbam-certificate), each covering one tonne of CO₂ equivalent (CO₂e) emitted in making the goods, and surrender them once a year. The rules are in the CBAM Regulation ([Regulation (EU) 2023/956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020)), as amended by [Regulation (EU) 2025/2083](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2083). CBAM exists to stop [carbon leakage](https://greenfineprint.com/glossary/carbon-leakage). EU producers pay for their emissions under the EU Emissions Trading System (EU ETS), but production outside the EU doesn't, so carbon-intensive production could move to countries with less strict climate rules. CBAM applies an equivalent set of rules to imports. The Regulation says CBAM will replace the EU ETS measures against carbon leakage, and the certificates you owe are adjusted to reflect the [EU ETS allowances](https://greenfineprint.com/glossary/emission-allowance) that EU producers of the same goods get free of charge. ### Where does CBAM stand now? CBAM entered into force on 17 May 2023. Its definitive period started on 1 January 2026, when the threshold, the authorisation requirement, declarations and penalties started to apply. The first declaration and surrender, for 2026, are due by 30 September 2027. A Commission proposal would extend CBAM to downstream goods and add anti-circumvention measures, COM(2025) 989. It is a proposal, not law. As proposed, the extension would apply from 1 January 2028. Our Decode on [the downstream proposal](https://greenfineprint.com/articles/cbam-downstream-products-extension) follows it. ### What did the 2025 simplification change? The simplification, Regulation (EU) 2025/2083, entered into force on 20 October 2025. Its main changes: * It added a yearly exemption for importers of 50 tonnes or less. * It set the declaration and surrender deadline at 30 September of the following year, to give declarants more time. * It made certificate sales start in 2027, for emissions in goods imported in 2026. * It cut the quarterly holding from 80% to 50% of [embedded emissions](https://greenfineprint.com/glossary/embedded-emissions). * It took non-calcined kaolinic clays out of scope. Our Decode on [what the 2025 simplification changed](https://greenfineprint.com/articles/cbam-simplification-changes) sets out each change next to the old rule. ### What happens if I don't comply? If you don't surrender enough certificates by 30 September, you pay a penalty for each missing certificate and still have to surrender them. The penalty equals the EU ETS excess emissions penalty for the year of import: €100 per tonne of CO₂e, rising with the European index of consumer prices for allowances issued from 1 January 2013. The EU ETS Directive doesn't state today's indexed amount, so we don't give one here. If you fall short because a producer, a verifier or the person certifying your carbon price documents gave you wrong information, the authority can reduce the penalty. Importing without authorisation costs more. A person other than an [authorised CBAM declarant](https://greenfineprint.com/glossary/authorised-cbam-declarant) who brings CBAM goods into the EU without meeting the obligations pays three to five times that penalty for each certificate not surrendered. The same applies to an importer without authorisation that exceeds the [50-tonne threshold](https://greenfineprint.com/glossary/cbam-50-tonne-threshold), counting all its emissions that year; paying releases it from declaring and surrendering for those imports. The authority can lower this penalty, though not below the basic one, if the threshold was exceeded by no more than 10%, or if the importer applied by 31 March 2026, kept importing and was refused. Customs authorities don't let anyone other than an authorised CBAM declarant import CBAM goods, except under the 50-tonne exemption. ### How is CBAM tied to the EU ETS? The CBAM Regulation ties three things to the EU ETS, which the EU ETS Directive ([Directive 2003/87/EC](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301)) sets up. Certificate prices follow EU ETS auction prices. The penalty for missing certificates is the EU ETS excess emissions penalty. The certificates due are adjusted for EU ETS [free allocation](https://greenfineprint.com/glossary/free-allocation). ### Who is affected CBAM applies to you if you import goods listed in its Annex I that originate outside the EU, unless an exemption covers you. It also covers products processed from those goods under the customs procedure called inward processing, and goods brought to platforms or other structures on an EU country's continental shelf or in its exclusive economic zone. #### Which goods are covered? Annex I lists the goods in six sectors: * Cement, including cement clinkers and calcined kaolinic clays * Electricity * Fertilisers, such as nitrogen fertilisers * Iron and steel, including some finished articles such as screws, bolts and steel structures * Aluminium, including aluminium structures and other aluminium articles * Hydrogen Goods are identified by their [Combined Nomenclature (CN) code](https://greenfineprint.com/glossary/cn-code), the EU's customs product code. The full list of codes is in [Annex I of the Regulation](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020#anx%5FI). #### Who is exempt under the 50-tonne threshold? You are exempt from all CBAM obligations in a calendar year if the net mass of the CBAM goods you import stays at or under 50 tonnes, with all CN codes added together. You declare the exemption in your customs declaration. Once you go over 50 tonnes, every obligation applies to all emissions in all goods you imported that year, including those imported before you crossed the threshold. The exemption never applies to electricity or hydrogen. By 30 April each year, the Commission checks whether the threshold still exempts no more than 1% of the emissions embedded in imports. It changes the threshold only if its calculation differs by more than 15 tonnes, and a new threshold applies from 1 January of the following year. Our [explainer on the threshold](https://greenfineprint.com/articles/cbam-50-tonne-threshold) walks through the test, with an example. #### What is out of scope? These goods are outside CBAM, whatever the quantity: * Goods originating in Iceland, Liechtenstein, Norway or Switzerland * Goods originating in Büsingen, Heligoland, Livigno, Ceuta or Melilla * Goods moved or used for military activities * Non-calcined kaolinic clays * Electricity generated, and hydrogen originating, on the continental shelf or in the exclusive economic zone of an EU country or of a country exempted in Annex III Electricity from a non-EU country whose power market is coupled with the EU's can be exempted, if the Commission finds that the conditions set out in the Regulation are met. The Regulation lists no such country yet. #### Who has to act? The importer is whoever lodges the customs declaration in its own name, or the client on whose behalf an [indirect customs representative](https://greenfineprint.com/glossary/indirect-customs-representative) lodges it. Four groups have a role: * **Importers established in an EU country** must hold the status of authorised CBAM declarant before they import CBAM goods, unless the threshold exempts them; they apply when they expect to exceed it. * **Indirect customs representatives**, who lodge customs declarations for a client, must get the status before importing, and always need it when the importer isn't established in the EU. * **Producers outside the EU** ("operators") can register their installations in the CBAM registry, have their emissions verified and share the data with EU importers; a registration lasts five years. Our guide to [what producers outside the EU need to do](https://greenfineprint.com/articles/cbam-non-eu-producers-exporters) covers their side. * **Verifiers** accredited for CBAM register with a competent authority, but not before 1 September 2026. Each EU country designates a competent authority, which grants the declarant status. The Commission's [list of competent authorities](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52026XC04231) is dated 31 July 2026. Applies to companies based: In the EU Outside the EU (exporting to it) ## What to do 1. **Check the 50-tonne threshold** Add up the net mass of all CBAM goods you import in the calendar year, with all CN codes together. If you stay at or under 50 tonnes and import no electricity or hydrogen, you are exempt for that year and declare the exemption in your customs declaration. [Explainer →](https://greenfineprint.com/articles/cbam-50-tonne-threshold) 2. **Get authorised, or use a representative** If your company is established in an EU country, you must apply through the CBAM registry to the competent authority in your EU country before you import; if the threshold exempts you, you apply when you expect to exceed it. Or you can import through an indirect customs representative that holds the status. If your company isn't established in the EU, you must import through an indirect customs representative that holds the status. If your company hasn't been established throughout the two financial years before the year you apply, the authority requires a guarantee. Importers and representatives that applied by 31 March 2026 can keep importing until the authority decides. [Explainer →](https://greenfineprint.com/articles/cbam-authorised-declarant) 3. **Get emissions data from your suppliers** Your declaration uses either actual emissions, checked by an accredited verifier, or default values. The Commission set the default values in Implementing Regulation (EU) 2025/2621. Producers outside the EU that registered can share their verified data with you. [Explainer →](https://greenfineprint.com/articles/cbam-default-values-actual-emissions) 4. **Buy and hold certificates** Your EU country sells certificates on a common central platform from 1 February 2027. The price is the weekly average of EU ETS auction closing prices; for 2026 emissions, it is the average of the quarter in which you imported the goods. From 2027, at the end of each quarter, your registry account must hold certificates for at least 50% of the embedded emissions in the goods you imported since the start of the year. [Explainer →](https://greenfineprint.com/articles/cbam-certificates-price-cost) 5. **Declare and surrender by 30 September** By 30 September each year, you must submit your CBAM declaration for the previous year in the CBAM registry and surrender the matching certificates; the first deadline is 30 September 2027, for 2026. You can let someone else submit the declaration, but you stay responsible. You can ask for excess certificates to be bought back by 31 October each year; certificates bought in 2027 for 2026 can only be bought back in 2027. Certificates bought for 2026 and still held are cancelled on 1 November 2027, without compensation. [Explainer →](https://greenfineprint.com/articles/cbam-certificates-price-cost) 6. **Check with an adviser** This is general information, not legal advice. For decisions about your company, check with a lawyer or adviser. For full details, go to the [official CBAM source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020) ## Key dates | Date | What happens | Who | Source | | ------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------ | | 1 Oct 2023 | The Regulation applies and the transitional period, with reporting duties only, starts | Importers | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 36(2) | | 31 Dec 2024 | The rules on authorisation, operator registration and the CBAM registry apply | Importers, indirect customs representatives and producers outside the EU | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 36(2)(a) | | 31 Dec 2025 | The transitional period ends | Importers | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 32 | | 1 Jan 2026 | The definitive period starts: the threshold, the authorisation requirement, declarations, verification and penalties apply | Importers and indirect customs representatives | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 36(2)(b) | | 31 Mar 2026 | Last day to apply for authorisation and keep importing until the authority decides | Importers and indirect customs representatives | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 17(7a) | | 1 Sep 2026 | Accredited verifiers can register in the CBAM registry from this date | Verifiers | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 10a(1) | | 1 Jan 2027 | The quarterly holding of certificates in Article 22(2) applies | Authorised CBAM declarants | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 36(2)(c) | | 1 Feb 2027 | Sales of CBAM certificates start | Authorised CBAM declarants | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 20(1) | | 30 Sep 2027 | First declaration and surrender, for 2026; then by 30 September every year | Authorised CBAM declarants | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 6(1) | | 1 Nov 2027 | Certificates bought for 2026 and still held are cancelled, without compensation | Authorised CBAM declarants | [32023R0956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) Art. 24(2) | | 1 Jan 2028 Change pending | Proposed, not law: CBAM would extend to downstream goods, under Commission proposal COM(2025) 989 | Importers of downstream goods | [52025PC0989](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025PC0989) Art. 2 | Legally binding dates only, each with its source. ## Articles REGULATION (EU) 2023/956 In force Change pending ### [EU CBAM authorised declarant: how to apply, or use a customs representative](https://greenfineprint.com/articles/cbam-authorised-declarant) Beyond the 50-tonne exemption, only authorised declarants can import CBAM goods into the EU. How to apply, the guarantee, and the representative route. 9 min read REGULATION (EU) 2023/956 In force Change pending ### [EU CBAM certificate price: how certificates work and what they cost](https://greenfineprint.com/articles/cbam-certificates-price-cost) How the EU CBAM certificate price is set, when you can buy, the 50% quarterly holding rule, surrender by 30 September 2027, and a worked cost example. 10 min read REGULATION (EU) 2023/956 In force Change pending ### [EU CBAM default values or actual emissions: which to use, and how embedded emissions are calculated](https://greenfineprint.com/articles/cbam-default-values-actual-emissions) Under the EU CBAM, you declare embedded emissions from verified supplier data or from default values with a mark-up. How to choose, and what to ask suppliers. 12 min read REGULATION (EU) 2023/956 In force Change pending ### [EU CBAM 50-tonne threshold: does it apply to you, and what if you cross it?](https://greenfineprint.com/articles/cbam-50-tonne-threshold) At 50 tonnes or less a year of CBAM goods (not electricity or hydrogen), you're exempt from the EU CBAM. What counts, and the penalty for crossing unauthorised. 11 min read REGULATION (EU) 2023/956 In force Change pending ### [EU CBAM for producers and exporters outside the EU: registration, verification and who pays](https://greenfineprint.com/articles/cbam-non-eu-producers-exporters) Making steel, aluminium, cement or fertiliser in India or elsewhere outside the EU? What EU CBAM means for you: optional registration, verification, who pays. 12 min read PROPOSAL COM(2025) 989 In force Change pending ### [EU CBAM downstream products: what the proposed extension covers, for whom and from when](https://greenfineprint.com/articles/cbam-downstream-products-extension) The Commission proposes adding downstream steel and aluminium goods to EU CBAM from 1 January 2028. Check the CN codes, who it affects and where it stands. 7 min read REGULATION (EU) 2025/2083 In force Change pending ### [EU CBAM simplification: what Regulation (EU) 2025/2083 changed](https://greenfineprint.com/articles/cbam-simplification-changes) EU CBAM simplification: a 50-tonne yearly threshold replaced the €150 exemption, the deadline moved to 30 September and the quarterly holding fell to 50%. 3 min read ## Official sources * Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism Regulation · Regulation (EU) 2023/956 · Adopted 10 May 2023 * [Text on EUR-Lex ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R0956) CELEX 32023R0956 * [European Legislation Identifier (ELI) ↗](http://data.europa.eu/eli/reg/2023/956/oj) http://data.europa.eu/eli/reg/2023/956/oj * [CBAM Regulation, consolidated text ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020) consolidated version of 20 October 2025, includes Regulation (EU) 2025/2083 * [Regulation (EU) 2025/2083, the simplification ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2083) of 8 October 2025 * [Commission proposal COM(2025) 989, extension to downstream goods ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52025PC0989) of 17 December 2025; a proposal, not law; procedure 2025/0419(COD) * [EU ETS Directive, consolidated text ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301) Directive 2003/87/EC, consolidated version of 1 March 2024; Article 16 sets the excess emissions penalty * [List of CBAM competent authorities ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52026XC04231) published by the Commission, 31 July 2026 * [European Commission, CBAM pages ↗](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism%5Fen) official guidance and services * [CBAM registry ↗](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-registry%5Fen) where declarants apply, declare and surrender ## What changed * 20 Jul 2026 Implementing Regulation (EU) 2026/1740 corrected Annexes I and IV of the default values act, Implementing Regulation (EU) 2025/2621 [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026R1740) * 16 Dec 2025 Implementing Regulation (EU) 2025/2619 set the information customs authorities pass on [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2619) * 16 Dec 2025 Implementing Regulation (EU) 2025/2620 set how the free allocation adjustment to the certificates due is calculated [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2620) * 16 Dec 2025 Implementing Regulation (EU) 2025/2621 set the default values [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2621) * 10 Dec 2025 Implementing Regulation (EU) 2025/2546 set the principles for verifying declared embedded emissions [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2546) * 10 Dec 2025 Implementing Regulation (EU) 2025/2547 set the methods for calculating embedded emissions [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2547) * 10 Dec 2025 Implementing Regulation (EU) 2025/2548 set how the certificate price is calculated and published [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2548) * 10 Dec 2025 Implementing Regulation (EU) 2025/2549 amended and corrected the authorisation rules in Implementing Regulation (EU) 2025/486 [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2549) * 10 Dec 2025 Implementing Regulation (EU) 2025/2550 amended and corrected the registry rules in Implementing Regulation (EU) 2024/3210 [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2550) * 20 Nov 2025 Delegated Regulation (EU) 2025/2551 set the conditions for accrediting verifiers [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2551) * 31 Oct 2025 Implementing Regulation (EU) 2025/2210 set the rules for goods brought to the continental shelf or exclusive economic zone of EU countries [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2210) * 20 Oct 2025 The simplification, Regulation (EU) 2025/2083, entered into force: a yearly 50-tonne exemption, a 30 September deadline, certificate sales from 2027 and a 50% quarterly holding [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R2083) * 17 Mar 2025 Implementing Regulation (EU) 2025/486 set the conditions and procedures for authorised CBAM declarant status [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32025R0486) * 18 Dec 2024 Implementing Regulation (EU) 2024/3210 set the rules for the CBAM registry [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32024R3210) * 17 Aug 2023 Implementing Regulation (EU) 2023/1773 set the reporting rules for the transitional period [Source ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1773) ```json {"@context":"https://schema.org","@graph":[{"@type":"WebSite","@id":"https://greenfineprint.com/#website","name":"Green Fine Print","url":"https://greenfineprint.com/","inLanguage":"en","publisher":{"@id":"https://greenfineprint.com/#publisher"}},{"@type":"NewsMediaOrganization","@id":"https://greenfineprint.com/#publisher","name":"Green Fine Print","url":"https://greenfineprint.com/","logo":{"@type":"ImageObject","url":"https://greenfineprint.com/card/logo.png","width":512,"height":512}},{"breadcrumb":{"@id":"https://greenfineprint.com/regulations/cbam#breadcrumb"},"@type":"WebPage","@id":"https://greenfineprint.com/regulations/cbam","url":"https://greenfineprint.com/regulations/cbam","name":"CBAM: Carbon Border Adjustment 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