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EU | Effective: 2023

Carbon Border Adjustment Mechanism (CBAM)

The carbon border tariff on imported iron, steel, aluminum, electricity, hydrogen, and other goods aims to bolster the EU’s green commitments and to ensure that the carbon price of imports equals that of goods produced domestically. On October 1, 2023, the CBAM entered its transition phase during which EU importers have to cyclicly report emissions embedded in the goods they bring into the bloc.

The final introduction of the mechanism will be staggered until January 2026, at which point importers will begin paying taxation based on the EU emission trading scheme (ETS) allowances.

Timeline for CBAM Implementation

  • Transition phase
    From October 2023 through December 2025, EU importers will have to report emissions embedded in their goods without paying a financial adjustment.
  • Definitive phase
    Starting January 2026, EU importers will have to declare annually the quantity of imported goods and associated emissions, followed by the corresponding amount of CBAM certificates.

Why not take a look at our guide on the CBAM, which covers what you need to know about the carbon border tax? Or if you would like to know more about assessing your company’s carbon footprint and the tools needed to cut down your emissions, head over to ecovadis.com/carbon.