From 1 January 2026, the definitive period of the Carbon Border Adjustment Mechanism (CBAM) on carbon emissions implicit in certain goods at the time of importation into the European Union begins.
The EU CBAM, established by Regulation (EU) 2023/956, consists of an environmental policy tool designed to combat carbon leakage by putting a fair price on carbon emitted during the production of carbon-intensive goods imported into the EU. Once fully implemented, it will require importers of such goods to purchase certificates equivalent to the carbon price that would have been paid if the goods had been produced under the EU’s carbon pricing rules.
Its implementation will continue gradually until 2034, so that there is a progressive, predictable and proportionate transition for EU and non-EU companies, as well as for competent authorities.
What does the definitive period of the CBAM imply for customs declarations?
Following the initial transitional phase (2023-2025), this new period (definitive phase) involves:
- the requirement of prior registration as a CBAM authorised before the competent national authority.
- the obligation of authorized importers to pay for CO2 emissions embedded in products such as steel, cement and fertilizers
- the replacement of the merely informative report with the purchase of CBAM certificates.
- verification of actual emissions by an accredited verifier
- updated exemptions: new “de minimis” rule (50 TN threshold applying to the total net mass of goods of all CN codes aggregated by importer and per calendar year)
- indication of CBAM-related codes/documents on import declarations
Codes/documents to declare in EU import customs declarations
From 1 January 2026, it is necessary to declare certain codes relating to CBAM in EU import declarations.
It is important to note that only the code corresponding to the transaction carried out must be declared. Otherwise, the customs declaration will be rejected by customs authorities of the importing Member State.
In the new EU H1 import system, these codes must be declared in data group 12 04 000 000 relating to Additional reference.
All the information on the application of the definitive period and the list of codes/documents to be included in the import declaration can be found in the Wisetech Academy course "The EU Carbon Border Adjustment Mechanism (CBAM)".
Impact on production and trade
The CBAM is designed to support the EU’s climate goals, drive global emissions reductions, and promote fair competition for European industries. Its impact on the overall market is expected to be very significant:
- Level the playing field: the CBAM aims to ensure that imported goods are subject to the same carbon costs as products manufactured within the EU. This helps prevent “carbon leakage,” where companies might otherwise relocate production to countries with less strict climate policies.
- Incentive for sustainability: the CBAM encourages producers worldwide to adopt cleaner, more sustainable manufacturing processes to remain competitive in the EU market.
- Consumer awareness: the mechanism may increase awareness among consumers and businesses about the environmental impact of the goods they purchase and trade.
- Global supply chains:
- Companies exporting to the EU will need to monitor and report the carbon emissions of their products.
- costs for carbon-intensive imports from third countries will increase and the same can happen with costs of downstream EU sectors,
- CBAM may shift imports to cleaner-producing countries or reduce imports from high-emission suppliers
- Export competitiveness for developing countries can be reduced.
The EU CBAM is the first of the Border Carbon Adjustments
The EU CBAM is the first of its kind, but the EU is not alone in exploring border carbon adjustment (BCA) as an approach to reduce carbon leakage. Several countries – including Canada, the United States, Australia, the United Kingdom and Türkiye – are planning to introduce similar Border Carbon Adjustments (BCAs) or exploring policy options to introduce their own carbon pricing mechanisms and incentive the production of less carbon-intensive products.
However, other major economies such us China, India, Brazil or South Africa have raised concerns about protectionism and potential incompatibility with WTO principles since the cost burden associated with “the polluter pays” principle may disproportionately affect developing countries.
The EU is committed to supporting developing and least developed countries in implementing the CBAM, greening their industries, and transitioning to renewable energy sources.