The Carbon Border Adjustment Mechanism (CBAM) obliges companies to purchase CO₂ certificates for emission-intensive imports. Reporting has been mandatory since October 2023.
From emissions trading to CBAM
CBAM - who is affected?
New de minimis threshold and other exemptions
Reporting obligations - what needs to be done?
A look at Norway and the UK
Sustainability is becoming a necessity: CBAM is part of the European Green Deal, which, among other things, aims to make Europe the first continent to become climate-neutral by 2050. An intermediate step is the reduction of CO₂ emissions.
To reduce the administrative input especially for traders that only import small amounts of CBAM goods, the EU Commission suggested adjustments to the CBAM regulation in February as part of the first Omnibus package. Let's take a look at the latest developments.
Reducing CO₂ emissions by 55% by 2030 compared to the baseline year of 1990 is an important EU target. To achieve this, CBAM is intended to supplement the European emissions trading system established in 2005, which is considered a central element of CO₂ reduction.
With the introduction of CBAM, the EU wants to encourage a more careful approach to CO₂ emissions worldwide, but also limit any economic disadvantages caused by "CO₂ leakage", i.e. the migration of industries to countries with less stringent regulations on CO₂ emissions. The border adjustment system will therefore ensure that production sites outside the EU are taken into account in emissions trading in the future.
The legal foundations were laid with Regulation (EU) 2023/956. This was specified in more detail on August 17, 2023 with Implementing Regulation (EU) 2023/1773 for the transition phase. The EU provides an overview of regulations and assistance on its Carbon Border Adjustment Mechanism website.
Specifically, anyone importing emissions-intensive goods into the EU must in future purchase CBAM certificates to compensate for the difference between the cost of CO₂ emissions in the country of production and the price of CO₂ certificates in the EU. In the transition phase until December 31, 2025, no purchase of CBAM certificates is necessary.
If the proposals of the first omnibus package are adopted, the mandatory purchase of CBAM allowances will not begin in 2026, but in 2027.
All companies that act as importers in the EU and, as such, import goods listed in Annex I of Regulation (EU) 2023/956 from third countries are affected. This concerns goods from the following sectors: iron and steel, aluminum, cement, fertilizers, electricity and hydrogen.
These companies must prepare a CBAM report on a quarterly basis and submit it no later than one month after the end of the quarter. This applies to the transition phase from October 1, 2023 to December 31, 2025. A CBAM report that has already been submitted can still be corrected up to two months after the end of the reporting quarter.
From the 2026 implementation phase, notifiers subject to reporting requirements must submit annual CBAM declarations requiring verification instead of quarterly CBAM reports. If the omnibus proposals come into force, the declaration does not have to be submitted by May 31, but only by August 31 of the following year.
Note: The decisive factor is the commodity code in the first four to eight digits (HS code and sometimes also CN code). If the commodity code is listed in Annex I, the goods are affected.
The most important proposed amendment to the omnibus packages of February 2025 regarding CBAM concerns the de minimis threshold. Until now, imports from 150 euros per shipment have been subject to the CBAM regulation. In future, a quantity limit of 50 tons per year is to apply. If the omnibus proposals are adopted, importers who do not exceed these thresholds will not be subject to any additional reporting obligations. This measure would exempt over 90 percent of the companies affected to date from the CBAM obligation.
Note: The Commission proposals are now going through the legislative procedure in the European Parliament and the Council. The Commission has requested that the legislative initiative be treated as a priority.
However, the reporting obligation is already waived for goods originating in the countries and territories listed in Annex III Section A - currently these are Switzerland, Liechtenstein, Norway and Iceland. This also applies to compensating products manufactured in a third country under the outward processing procedure.
Note: Exceptions are defined in Article 2 and Article 34 of Regulation (EU) 2023/956.
The declarant or, if the declarant is not established in the EU, their indirect representative is obliged to report. The following three types of reporting can be used for different periods of time:
The English-language „Guidance document on CBAM installations for importers of goods into the EU” from August 2023 provides importers with important assistance from the EU. A quick guide is provided on the first few pages for a better overview.
The reports are submitted via the EU CBAM portal. Importing companies within the EU always receive the access data via their national authority.
Watch out for future reports:
Article 16 of the CBAM Implementing Regulation provides for penalties of between 10 and 50 euros per tonne of unreported emissions if deadlines are missed or reports are incomplete or inaccurate.
Tip: If you use AEB for your import processing, you can extract data from the system and analyze it in Excel. For example, AEB provides a CBAM data extract free of charge in the Import Filing: ATLAS standard.
Since March 31, 2025, CBAM declarants can apply for the status of “approved CBAM declarant” via the CBAM register. The status of approved CBAM declarant will become mandatory for the import of CBAM goods into the customs territory of the EU from January 1, 2026. According to Article 4 of the CBAM Regulation (EU) 2023/956, the goods concerned "may only be imported into the customs territory of the Union by an authorized CBAM declarant".
Affected parties can also access the authorization module in the CBAM register via the customs portal. Conditions and procedures are published in Implementing Regulation (EU) 2025/486 of March 17, 2025 and have been valid since March 28, 2025. The following information is required in accordance with Articles 5 and 17 of the CBAM Regulation:
The EU Commission offers free online seminars and learning modules in the Customs & Tax EU Learning Portal. It is best to search under the keyword “CBAM”.
Without the possibility to use standard values, CBAM reporting obligations become a major challenge. AEBs new, London-based partner CBAMBOO has a solution to the data dilemma: an international network for manufacturers and suppliers. For example, AEB customers can easily enrich, filter and process their data from EU imports on CBAMBOO's online platform.
Manufacturers and suppliers from third countries also have the option of providing their European customers with the required data on CBAMBOO. This is easier and less error-prone than using Excel, and the data is always up to date. For users, the structured "Carbon Flow" graphical interface shows which emissions are generated where in the supply chain.
These features also impressed Elisabeth Götting/Mark Brannan from the CBAM project team at AEB: "With its usability and the network idea, CBAMBOO already clearly stands out from the market. This makes the platform the perfect addition for AEB customers."
It is not only in the EU that border adjustment is being promoted: Norway wants to participate in EU CBAM from 2026 as part of voluntary cooperation, according to the Norwegian government in its press release dated October 7, 2024.
The UK has also announced UK CBAM from 2027.
