As of January 1, 2026, the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) has officially entered its definitive regime, moving from transitional data reporting to full financial compliance for covered imports.
What is CBAM?
From January, EU importers become financially liable for the embedded emissions in CBAM covered goods, fulfilled through the purchase and surrender of certificates under the CBAM framework.
For organizations importing covered goods into the EU, the 2026–2027 cycle represents a critical inflection point. The amendments adopted in Regulation (EU) 2025/2083 (the CBAM Omnibus simplification package) adjust thresholds, timelines, and procedural requirements to reduce administrative burden while maintaining environmental integrity (see the Commission’s announcement here).
The 2026–2027 compliance timeline
- January 1, 2026: The definitive regime applies. Importers incur financial liability for embedded emissions in goods imported from this date onward (Commission CBAM overview).
- March 31, 2026: Deadline to apply for Authorized CBAM Declarant (ACD) status if cumulative imports are expected to exceed the 50 ton annual threshold. Importing may continue while authorization is pending provided a valid application has been submitted by this date (Commission news reminder and ACD guidance: CBAM goes live on 1 January 2026; implementing rules on ACD status: Implementing Regulation (EU) 2025/486).
- From 2026–2027– CBAM certificates and pricing: Certificates are sold by national competent authorities, with the CBAM certificate price calculated as the average EU Emissions Trading System (EU ETS) auction price (quarterly in 2026, weekly from 2027) as set out in the Commission’s CBAM overview and supporting legal acts on pricing and registry operations listed under CBAM Legislation and Guidance.
- September 30, 2027: First annual CBAM declaration due, covering all 2026 imports, together with the surrender of the required number of CBAM certificates (see Regulation (EU) 2025/2083 and Commission summary/guidance on the CBAM overview).
Key regulatory updates for 2026
- The 50 ton mass based threshold: The former low value exemption (€150 per shipment) has been replaced by a single mass based de minimis threshold of 50 tons per importer per calendar year (cumulative net mass). Importers whose annual imports of iron and steel, aluminum, cement, and fertilizers do not exceed 50 tons are exempt from authorization, annual declarations, and certificate obligations. Electricity and hydrogen are excluded from this exemption and remain in scope regardless of volume. If the threshold is exceeded at any point during the year, all imports for that calendar year become subject to CBAM obligations (see the Commission’s simplifications notice and Access2Markets guidance on the start of the definitive period, including customs codes and the de minimis rule: Access2Markets notice).
- Mandatory verification of actual emissions: From January 1, 2026, EU importers may only report actual emissions data in their CBAM declarations if that data has been verified by an accredited third party verifier operating under CBAM specific verification principles aligned with the EU ETS (see Implementing Regulation (EU) 2025/2546 – verification principles and the Commission’s Access2Markets notice confirming verifier accreditation for actuals: Access2Markets notice). Where verified actual emissions are unavailable, importers must apply Commission-default values established under Implementing Regulation (EU) 2025/2621 (see also CBAM Legislation and Guidance).
- Sector specific emissions treatment (direct vs. indirect): CBAM applies differentiated emissions treatment during the definitive period:
- Iron and steel: Only direct emissions are taken into account (priced and surrendered) under CBAM for these goods; indirect electricity emissions are not taken into account for CBAM purposes for iron and steel (Annex II and Annex IV framework).
- Aluminum: Only direct emissions are taken into account (priced and surrendered) under CBAM; indirect electricity emissions are not taken into account for aluminum (Annex II/Annex IV framework).
- Cement and fertilizers: Both direct and indirect (electricity) emissions are taken into account (priced and surrendered) from the start of the definitive regime using the Annex IV methods as specified in Implementing Regulation (EU) 2025/2547 (see also Annex IV).
These requirements are defined collectively by Annex I (goods and CN codes) and Annex IV (embedded emissions methodology) of Regulation (EU) 2023/956 and are summarized on the Commission’s CBAM portal.
Why CBAM matters for non-EU suppliers
CBAM is fundamentally value chain driven. While legal liability rests with the EU importer (or their indirect customs representative), compliance depends on the ability of non EU producers to generate accurate, verifiable emissions data.
Suppliers capable of providing an assurance-ready evidence package covering system boundaries, activity data, monitoring methodologies, and verification documentation aligned with Annex IV will be commercially advantaged. Where verified data is unavailable, default values apply, increasing CBAM costs and directly affecting supplier competitiveness (see the Commission’s CBAM guidance hub and Access2Markets’ definitive-period notice).
Action plan
- Q1–Q2 2026 – registration and mapping: Monitor cumulative imports and submit ACD applications by March 31, 2026, where thresholds may be exceeded (Commission reminder and ACD rules: news reminder, Implementing Regulation (EU) 2025/486).
- Q2–Q3 2026 – gap assessment: Assess existing emissions data against Annex IV monitoring and verification requirements (see also the calculation methods in Implementing Regulation (EU) 2025/2547).
- Q4 2026–Q1 2027 – pre verification: Conduct internal readiness reviews or mock audits prior to engaging accredited verifiers (verification principles: Implementing Regulation (EU) 2025/2546; registry/operational materials under CBAM Legislation and Guidance).
- Q1–Q3 2027 – reporting and surrender: Support EU importers through the first annual CBAM declaration and certificate surrender by September 30, 2027 (Regulation (EU) 2025/2083, Commission CBAM overview).
Managing the accountability shift
The CBAM regulation fundamentally changes the role of emissions data in international trade. Under the definitive regime, embedded emissions are no longer a voluntary sustainability metric; they are a regulated input into a financial compliance obligation borne by the EU importer and driven by data generated upstream in the supply chain.
While legal liability for CBAM declarations and certificate surrender rests with the EU importer (or their indirect customs representative), importers are structurally dependent on non-EU manufacturers to provide emissions data calculated in line with Annex IV methodologies and verified by accredited third-party verifiers (verification principles: Implementing Regulation (EU) 2025/2546).
Where verified data is unavailable, importers must rely on default values, which can increase CBAM costs and directly influence sourcing decisions (default values: Implementing Regulation (EU) 2025/2621; operational guidance: CBAM Legislation and Guidance). Organizations that act early to establish Annex IV aligned monitoring systems, verification-ready documentation, and transparent data exchange with EU customers will be better positioned to maintain EU market access, remain competitive in procurement processes, reduce exposure to higher default value costs, and build long term trust with EU buyers as CBAM requirements tighten over time.
