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Carbon Border Adjustment Mechanism

Climate change is a global problem that needs global solutions. As the EU raises its own climate ambition, and as long as less stringent climate policies prevail in many non-EU countries, there is a risk of so-called ‘carbon leakage’. Carbon leakage occurs when companies based in the EU move carbon-intensive production abroad to countries where less stringent climate policies are in place than in the EU, or when EU products get replaced by more carbon-intensive imports.

The EU’s Carbon Border Adjustment Mechanism (CBAM) is our landmark tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. The gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry.

By confirming that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU, the CBAM will ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU’s climate objectives are not undermined. The CBAM is designed to be compatible with WTO-rules.

Latest developments

On 1 October 2023, the CBAM entered into application in its transitional phase, with the first reporting period for importers ending 31 January 2024.

Key elements

The CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. The objective of the transitional period is to serve as a pilot and learning period for all stakeholders (importers, producers and authorities) and to collect useful information on embedded emissions to refine the methodology for the definitive period.

The gradual phasing in of CBAM over time will also allow for a careful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities. During this period, importers of goods in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without making any financial payments or adjustments. Indirect emissions will be covered in the scope after the transitional period for some sectors (cement and fertilisers), on the basis of a defined methodology outlined in the Implementing Regulation published on 17 August 2023 and its accompanying guidance.

The Implementing Regulation on reporting requirements and methodology provides for some flexibility when it comes to the values used to calculate embedded emissions on imports during the transitional phase. Until the end of 2024, companies will have the choice of reporting in three ways: (a) full reporting according to the new methodology (EU method); (b) reporting based on an equivalent method (three options); and (c) reporting based on default reference values (only until July 2024). As of 1 January 2025, only the EU method will be accepted and estimates (including default values) can only be used for complex goods if these estimations represent less than 20% of the total embedded emissions. The Commission will publish default values by the end of 2023, well in time to contribute to the reports importers need to submit by the end of January 2024. This report from the EU’s Joint Research Centre (JRC) will feed into the preparation of those default values.

The Commission has also developed dedicated IT tools to help importers perform and report these calculations, as well as in-depth guidance, training materials and tutorials to support businesses when the transitional mechanism begins. While importers will be asked to collect fourth quarter data as of 1 October 2023, their first report will only have to be submitted by the end of January 2024.

Once the permanent system enters into force on 1 January 2026, importers will need to declare each year the quantity of goods imported into the EU in the preceding year and their embedded GHG. They will then surrender the corresponding number of CBAM certificates. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in €/tonne of CO2 emitted. The phasing-out of free allocation under the EU ETS will take place in parallel with the phasing-in of CBAM in the period 2026-2034.

A review of the CBAM’s functioning during its transitional phase will be concluded before the entry into force of the definitive system. At the same time, the product scope will be reviewed to assess the feasibility of including other goods produced in sectors covered by the EU ETS in the scope of the CBAM mechanism, such as certain downstream products and those identified as suitable candidates during negotiations. The report will include a timetable setting out their inclusion by 2030.

Transitional CBAM registry

The Commission has developed the CBAM transitional registry to help importers perform and report as part of their CBAM obligations. Access to the registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established.

CBAM Transitional Registry – Link for importers 

6 OCTOBER 2023
Provisional list of CBAM National Competent Authorities (NCAs)
(268.13 KB – PDF)


Legislative Documents

17 MAY 2023
CBAM regulation in the Official Journal of the EU
(117.57 KB – HTML)


17 AUGUST 2023
CBAM Implementing Regulation for the transitional phase
(1.16 MB – HTML)


17 AUGUST 2023
Annexes to the CBAM Implementing Regulation for the transitional phase
(1.16 MB – HTML)



To help stakeholders prepare for the new reporting obligations as from 1 October 2023, the European Commission has prepared written guidance documents, to help navigate the transitional period (1 October 2023 – 31 December 2025).

The Commission has also made available a step-by-step checklist and sector-specific factsheets for EU importers of goods in the scope of CBAM.

17 AUGUST 2023
Guidance document on CBAM installations for importers of goods into the EU
(1.64 MB – PDF)


17 AUGUST 2023
Guidance document on CBAM installations for installation operators outside the EU
(4.22 MB – PDF)


22 AUGUST 2023
CBAM communication template for installations – PRELIMINARY 22.8.2023
(1.19 MB – XLSX)



The Commission is organising six online webinars, covering general features of the CBAM as well as the specifics of each sector (iron & steel, aluminium, cement, fertilisers, electricity and hydrogen).

Interested stakeholders are invited to register and participate in the webinars, and will have the possibility to ask questions which will be answered live. All webinars will be recorded and uploaded on the Customs & Tax EU Learning Portal.

Topic Date and registration
CBAM Transitional Registry
Traders’ Info Session
27 October 2023, 10h00 CET
Registration is available here
Cement The webinar recording is available here.
Aluminium The webinar recording is available here.
Fertilisers The webinar recording is available here.
Electricity The webinar recording is available here.
Hydrogen The webinar recording is available here.
Iron and steel The webinar recording is available here.

A seventh webinar for National Competent Authorities will also be organised. The date will be communicated at a later stage.

E-learning courses

A first nano-learning module gives a short top level introduction to CBAM for EU importers and customs declarants and third country operators. It presents the purpose and aims of CBAM, and implications for importers and declarants, the main criteria for CBAM pricing, the six sectors targeted by CBAM and the roles and responsibilities within the CBAM administration system, as well as planning priorities including key milestones and explains the calculation methods and reporting requirements.

Further training modules covering sector-specific content will soon become available on the Customs & Tax EU Learning Portal.

Further info

10 MAY 2023
CBAM Factsheet
(949.32 KB – PDF)


17 JULY 2023
Questions and Answers: Carbon Border Adjustment Mechanism (CBAM)
(269.17 KB – PDF)