CBAM Guide: Requirements, Deadlines, and Who Has to Comply

What Is CBAM and Who Has to Comply in 2026?

CBAM is an EU carbon price on imported goods. It applies to cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. The legal obligation sits with the EU importer, not the foreign producer. Any importer bringing more than 50 tonnes of covered goods into the EU in a calendar year must hold authorised CBAM declarant status, report the emissions embedded in those goods, and surrender CBAM certificates to cover them. The definitive period began January 1, 2026. The first annual declaration covering 2026 imports is due September 30, 2027, and certificate sales open February 1, 2027. Producers outside the EU carry no direct legal duty, but their EU customers cannot file without their emissions data.

CBAM Key Facts at a Glance

What Problem CBAM Was Written to Solve

The EU Emissions Trading System (ETS), the bloc's cap-and-trade market for industrial and power sector carbon, puts a price on emissions from EU producers of steel, cement, aluminium, and fertiliser. For two decades it also handed those producers free allowances, on the theory that charging them a carbon price their foreign competitors did not pay would push production offshore rather than reduce emissions. That risk has a name in EU policy documents: carbon leakage.

CBAM is the replacement for free allocation. Instead of shielding EU producers by giving them free allowances, the EU charges importers for the carbon in competing goods and withdraws the free allowances on a fixed schedule. Free allocation for CBAM sectors falls from 97.5 percent in 2026 to zero in 2034, and the CBAM obligation rises to fill the gap.

That design explains most of what feels strange about the rules. CBAM prices the same tonne of carbon that the ETS prices, so it references ETS auction prices rather than setting its own. It credits carbon prices already paid in the country of production, so a producer under a domestic carbon price is not charged twice. And it demands installation-level emissions data rather than a corporate footprint, because an ETS allowance is surrendered against a specific installation's verified emissions. CBAM asks foreign producers for the same evidence an EU producer already generates.

What Changed in 2025 and 2026

Adopted and in Force

Regulation (EU) 2025/2083, the simplification regulation, was adopted October 8, 2025 and entered into force October 20, 2025. It simplified the definitive period:

• The €150 per-consignment exemption was replaced by a single 50-tonne annual mass threshold. The Commission's own analysis is that this exempts about 90 percent of importers while keeping 99 percent of embedded emissions in scope.
• The annual declaration deadline moved from May 31 to September 30 of the following year.
• Certificate sales were pushed from January 1, 2026 to February 1, 2027. Certificates bought in 2027 cover 2026 imports at 2026 prices.
• The quarterly holding requirement dropped from 80 percent to 50 percent of embedded emissions imported year to date.
• Importers who filed an authorisation application by March 31, 2026 may keep importing provisionally while the competent authority decides.
• Use of Commission default values was broadened, and carbon prices paid in third countries became deductible with independent verification.

The definitive period itself began January 1, 2026. Imports from that date carry a financial obligation, settled retroactively in 2027.

Verifier accreditation opened in April 2026. The Commission expects the first CBAM verifiers to receive accreditation around September 2026 and the first verification reports to be issued from January 2027.

Ten Commission guidance documents were published August 14, 2026, including six sector-specific guides covering cement, hydrogen, fertilisers, iron and steel, aluminium, and electricity, each with production process detail, value chain mapping, and worked monitoring examples. If you are building a monitoring plan for a non-EU installation, start there.

Still in Progress

The downstream scope extension. The Commission proposed extending CBAM to roughly 180 additional customs codes covering steel- and aluminium-intensive finished goods, from nails and machinery to cars and washing machines, with application targeted for January 1, 2028. The Council agreed its position on June 12, 2026, adding pre-consumer metal scrap to scope. The Parliament's environment committee backed a broader list on July 7, 2026, with a plenary position expected in September 2026 and trilogue agreement targeted before the end of 2026. The final product list will differ from all three current positions.

Anti-circumvention rules. The same proposal would widen the definition of circumvention to cover artificially restructuring supply chains to qualify for a lower default value, introduce a broader concept of abusive practice, and let national authorities require financial guarantees from declarants.

Who Has to Comply with CBAM

The Volume Test

The threshold is more than 50 tonnes of CBAM goods, by cumulative net mass, per importer per calendar year. It is a single test across all covered goods, not per sector and not per shipment.

An importer bringing in 20 tonnes of aluminium extrusions, 20 tonnes of steel tube, and 15 tonnes of fertiliser is at 55 tonnes and is in scope, even though no single category would have triggered it alone. Splitting those imports across related entities to stay under the line is explicitly treated as a non-genuine arrangement and carries the enhanced penalty.

The Commission reviews the threshold annually and must confirm that at least 99 percent of embedded emissions remain in scope. It can adjust the number by delegated act, so 50 tonnes is the figure for now rather than a permanent one.

The Declarant Test

The legal obligation sits with the importer of record established in the EU. Where the importer is not established in the EU, it falls on the indirect customs representative acting on their behalf. That entity must hold authorised CBAM declarant status, granted by the competent authority in its member state of establishment.

This is the single most misread point in the regime. A steel mill in Ohio shipping to a distributor in Rotterdam has no CBAM filing obligation. The distributor does.

Producers Outside the EU

Non-EU installation operators have no direct legal obligation under CBAM.

An EU importer filing a CBAM declaration has two options. Use the Commission's default values, which require no verification and no supplier cooperation. Or use actual emissions, which require the producer to run a monitoring plan to the CBAM methodology and have the result verified by an accredited verifier.

Default values are constructed from the average emission intensity of the ten highest-emitting exporting countries. That is deliberate. A producer with a genuinely lower carbon intensity than that benchmark is charged as though it does not, and the difference lands on the importer's certificate bill. The importer notices, and the request goes back up the chain.

This is why suppliers with no EU legal exposure are fielding CBAM questionnaires. Steel Warehouse, a US steel processor, saw exactly this pattern: customers navigating CBAM began sending emissions data requests to its procurement and sustainability teams, and the company was answering them out of Excel and Microsoft Forms. Working with Gravity, it automated scope 1 and 2 measurement across all its facilities in five weeks using utility API connections and AI bill scanning, and cleared its outstanding CBAM customer requests.

Who Is Out of Scope

• Importers under 50 tonnes cumulative net mass per year
• Goods originating in countries inside or fully linked to the EU ETS, currently Iceland, Liechtenstein, Norway and Switzerland
• Goods in the personal baggage of travellers below the value threshold
• Certain offshore hydrogen and electricity cases carved out by the 2025 simplification

CBAM Deadlines

The March 31, 2026 provisional-import concession has passed. An importer over the threshold that neither holds authorisation nor has a pending application is importing unlawfully now, and the penalty for that is three to five times the standard rate. Separately, the quarterly 50 percent holding requirement is a running obligation from the first quarter certificates are available, not an annual settlement. It is a cash flow item, and treasury should see the 2027 profile before Q1 2027 closes.

What You Have to Report

A CBAM declaration reports embedded emissions per tonne of goods, per installation of production. Not a corporate footprint, and not a national average.

The declaration covers:

• Direct embedded emissions from the production processes for the goods, calculated to the CBAM methodology set out in the Commission's implementing rules
• Indirect emissions from electricity consumed in production, for the sectors where they are in scope
• Precursor emissions carried in from upstream inputs, which is why steel and aluminium reporting reaches back into the value chain rather than stopping at the gate
• The installation where each good was produced, identified in the CBAM registry
• Any carbon price already paid in the country of production, with evidence, deductible from the obligation
• The methodology and data sources used, with the monitoring plan behind them

The evidence standard is what makes this hard rather than the arithmetic. Getting from an annual energy total to a per-tonne embedded emissions figure for a specific product from a specific installation requires production volumes, energy consumption allocated to process, precursor purchases with their own emissions data, and a documented allocation approach. Most manufacturers have those numbers in four systems and no reconciliation between them.

CBAM Verification Requirements

Verification is required only where actual emissions are used. Declarations built on Commission default values need no verifier.

Where actual values are used, the emissions must be verified by an independent verifier accredited by an EU national accreditation body specifically for CBAM. Accreditation opened in April 2026, the first accreditations are expected around September 2026, and the first verification reports can be issued from January 2027. Verified data sits in the CBAM registry, and the declarant pulls it from there rather than from the supplier directly.

The sequencing is tight. A producer that wants its actual emissions in a customer's September 2027 declaration needs a monitoring plan running now, a verifier engaged when accreditation lands, and a verification completed in the first three quarters of 2027. Verifier capacity in the first cycle will be the constraint, not the methodology.

Penalties for CBAM Non-Compliance

• Failure to surrender enough certificates: €100 per tonne of CO₂e uncovered. The amount is tied to the EU ETS excess emissions penalty under Article 16(3) of the ETS Directive and is indexed. Paying it does not discharge the obligation. The certificates are still owed, at market price.
• Importing above the 50-tonne threshold without authorised declarant status: three to five times the standard penalty, set by member states with regard to the gravity, duration, and intentionality of the breach.
• Repeated serious infringement: revocation of authorised CBAM declarant status, which removes the legal ability to import covered goods at all. For an importer whose business is those goods, this is the consequence that matters, not the fine.
• Incorrect declarations are corrected by the competent authority with the certificate shortfall penalty applied to the difference.

What CBAM Will Cost

The certificate price is the EU ETS auction price, averaged quarterly for 2026 and weekly from 2027. EU allowances traded in a range around €74 per tonne in May 2026.

The multiplier that determines the actual bill is the CBAM factor, which tracks the withdrawal of free allocation:

An illustration. Take 1,000 tonnes of steel at an illustrative 2.0 tonnes of CO₂e embedded per tonne, so 2,000 tonnes of CO₂e, at €74 per tonne.

• 2026: 2.5 percent chargeable, 50 tonnes, roughly €3,700
• 2030: 48.5 percent chargeable, 970 tonnes, roughly €71,800
• 2034: 100 percent chargeable, 2,000 tonnes, roughly €148,000

The intensity figure here is illustrative, not a Commission default value, and the ETS price in 2034 will not be the 2026 price. The shape is the point. The 2026 cost is small enough to absorb without noticing and the 2030 cost is a line item that changes sourcing decisions. A supplier whose actual intensity beats the default benchmark has a quantifiable commercial advantage from about 2029 onward, and no way to prove it without verified data.

How to Prepare for CBAM

1. Settle Whether You Are the Declarant, in Writing

Confirm which legal entity is the importer of record for every EU-bound flow, and whether an indirect customs representative sits in the chain. If you are a non-EU producer, identify which of your customers are the declarants. The answer determines whether you have a filing obligation or a data obligation.

2. Get Authorisation in Place if You Are over the Threshold

The March 31, 2026 provisional-import window has closed. If you import more than 50 tonnes of covered goods a year and do not hold authorised CBAM declarant status or a pending application, apply to the competent authority in your member state of establishment now and stop treating this as a 2027 problem.

3. Build Installation-Level Measurement Before You Build Reports

CBAM needs emissions per tonne of product per installation, which means production volumes and energy consumption reconciled at facility level. Most companies discover the gap here, not in the calculation. Automate the utility and fuel data collection first, because it is the input every downstream number depends on and the slowest thing to fix manually.

4. Decide Actual Versus Default, per Product Line, on the Numbers

Estimate your actual intensity against the Commission's published default for the relevant good. Where you beat the default comfortably, the verification cost pays for itself as the CBAM factor rises and you should start the monitoring plan now. Where you do not, defaults may be the rational choice for a few more years. Make this an explicit decision rather than a default from inaction.

5. Book Verifier Capacity Early

Accreditation is only landing from around September 2026 and the first verification reports can be issued from January 2027. Every producer wanting actual emissions in a September 2027 declaration is competing for the same small pool of accredited verifiers in the same nine months.

6. Build the Inventory Once

The facility-level energy and emissions data CBAM requires is the same data underlying CSRD, CDP, customer questionnaires, and any credible decarbonisation plan. Build it once, on a system that keeps the evidence trail, and export it. Building it separately for each requester is how organisations end up with four numbers for the same site.

How Does CBAM Compare to CSRD, California, CDP and ISSB?

CBAM is not a disclosure regime, and confusing it with one leads to the wrong project.

CSRD asks a company to report its own sustainability performance and impacts to investors and the public, at corporate level, on an annual cycle, with limited assurance. The scope was cut by roughly 85 percent under Omnibus I, which means many companies now facing CBAM through their EU customers no longer face CSRD directly.

California SB 253 and SB 261 ask large companies doing business in the state to disclose scope 1, 2 and 3 emissions and climate-related financial risk, again at corporate level.

CDP and the ISSB standards are corporate-level disclosure, one voluntary and buyer-driven, one an investor-facing baseline being adopted jurisdiction by jurisdiction.

CBAM asks a different question entirely. Not what your company emitted last year, but how much carbon is embedded in this specific tonne of this specific product from this specific plant. It is a customs and pricing mechanism attached to a trade flow, and it produces an invoice rather than a report.

The two do converge underneath. Both need metered energy consumption by facility, fuel use by source, purchased electricity with supplier factors, and production volumes, all reconciled and evidenced. A company that has built that foundation can allocate it to product for CBAM and aggregate it to entity for scope 1, 2 and 3 reporting. A company that has not will build it twice. If you are working out which obligations actually apply to you, our guide to choosing a climate disclosure framework maps the landscape.

How Gravity Helps You Answer CBAM Data Requests

There are three ways to get CBAM-grade data: build it in-house, hire a consultancy per reporting cycle, or run it on a platform. Gravity is an integrated energy and carbon management platform combining software, expert support, and a vendor network, and it is built for the part of CBAM that is actually hard — getting reliable, evidenced, facility-level energy and emissions data out of operations that were never set up to produce it.

• Automated data collection. Utility API connections and AI bill scanning pull electricity, gas, and fuel data across every facility without manual entry. For a multi-site manufacturer, this is the difference between a measurement programme that takes weeks and one that takes quarters.
• Facility-level granularity. CBAM needs emissions attributable to a specific installation, not a corporate total. Gravity structures data by site from the start, which is also what makes energy efficiency analysis possible.
• Evidence for verification. Data logs and supporting evidence attached to every data point, with documentation centralised. Gravity does not provide assurance, which comes from an accredited third-party verifier, but it produces the audit trail a verifier tests, which is where most verification cycles stall.
• One inventory, many outputs. The same underlying data exports to CSRD, CDP, ISSB, customer questionnaires, and CBAM data requests, so the answer to your EU customer and the answer to your investors come from one set of numbers.
• Expert assistance. A dedicated Climate Strategist helps work through the judgment calls CBAM forces, starting with whether actual emissions or default values are the right answer for each product line.

That is roughly the path Steel Warehouse took when CBAM requests started arriving from its European customers. Talk to an expert about what your CBAM data position looks like.