CBAM: Carbon Border Adjustment Mechanism - 2026 Status

The Carbon Border Adjustment Mechanism (CBAM) is an EU mechanism that equalizes CO₂ costs of imported goods with EU ETS prices. It prevents Carbon Leakage – the relocation of dirty production from the EU – and creates fair competitive conditions for energy-intensive industries.

This post explains how it works, the timeline, affected goods, and what importers specifically need to consider in 2026.

What is CBAM and why was it introduced?

CBAM belongs to “Fit for 55” package. As part of the associated CO₂ pricing The EU is gradually phasing out the free EU ETS allocation. To avoid disadvantaging EU companies, imports from non-EU countries will be subject to the same CO₂ costs.

ProblemEnergy-intensive EU companies pay CO₂ prices (currently €70-100/t), while third countries often do not. Result: competitive disadvantages, “flight” to countries without CO₂ pricing.

SolutionImporters pay CBAM certificates for embedded emissions at the EU ETS weekly price.

How does CBAM work?

Step-by-step:

1. Customs declarationImporter reports goods (cement, steel, aluminum, fertilizer, hydrogen, electricity).
2. Emissions calculationDirect (production) + indirect (electricity) CO₂ emissions of the manufacturer.
3. Buy certificatesCBAM certificates at the EU ETS price cover emissions.
4. MatchCO2 costs already paid in the country of origin will be credited.
5. Redemption: Quarterly, due by May 31 (next year); a maximum of 33% may be returned.

Registration: Since 2025 at national customs authorities. From 2026 complete duty.

Affected Goods & Sectors (2026)

Extension 2026+Organic Chemistry, Plastics, Textiles.

Schedule: Transition to full CBAM

ImportantFrom 2026 no more free ETS certificates for affected sectors.

Practical Obligations for Importers

RegistrationAt the customs authority (DE: Zollamt). Free, one-time.

Quarterly reports (until 2025)

• Quantity of imported goods (t)
• Direct Emissions Manufacturer (t CO₂)
• Indirect Emissions (Electricity) (t CO₂)
• Already paid CO₂ costs

Starting in 2026:

• Buy CBAM Certificates (EU-ETS Price)
• Final invoice by May 31st
• Refund (max. 33 %)

Data sources:

• Manufacturer's specifications (preferred)
• EU Benchmark Values (Standard Cases)

Impacts for Businesses

Importers

• Cost increase20–50 €/t of goods (depending on the sector)
• Data procurement: Evidence from third countries
• Compliance RiskPenalties for default:

Producers (EU)

• Competitive advantageExpensive import
• ETS printingFewer free certificates

Exporters (Third Countries)

• IncentiveIntroduce CO₂ price
• Benchmark riskDefault values often higher

Opportunities for German Companies

CBAM as a competitive advantage:

Low-CO₂ production → lower EU ETS costs
→ Fair Prices vs. Imports
Secure market shares

Strategies

1. Emissions reduction (Production, Electricity Purchase)
2. CO₂ Reporting optimize
3. Check supply chain (Third-country certificates)
4. CBAM-compliant contracts

Conclusion: CBAM as a Competitive Lever

CBAM creates fair conditions for low-carbon EU production. Importers must act from 2026, producers benefit long-term.

Check now:

• Analyze import volume
• Ensure emissions data
• Build compliance processes

Frequently Asked Questions