CBAM Explained: EU Carbon Tariff Scope, Phases, and Compliance Steps
What Is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is the European Union’s regulatory framework for imposing carbon costs on certain imported goods based on their embedded greenhouse gas emissions. Commonly referred to as the “EU carbon tariff”, CBAM was established under Regulation (EU) 2023/956, officially adopted on May 17, 2023, and entered into force on October 1, 2023.
CBAM is a central component of the European Green Deal and part of the “Fit for 55” legislative package, aimed at reducing greenhouse gas emissions by 55% by 2030. It supports the EU Emissions Trading System (EU ETS) and aims to prevent carbon leakage by ensuring imported goods are subject to similar carbon costs as those produced within the EU.
Scope of CBAM
CBAM currently applies to six categories of carbon-intensive goods:
| Product Category | Product Name (CN Code) | Regulated Greenhouse Gas |
| Cement | – Calcined and other kaolin (25070080) – Cement clinker (25231000) – White Portland cement (25232100) – Portland cement (25232900) – Bauxite cement (25233000) – Other hydraulic cements (25239000) |
Carbon dioxide (CO₂) |
| Electricity | – Electricity (27160000) | Carbon dioxide (CO₂) |
| Chemicals | – Hydrogen (280410000) | Carbon dioxide (CO₂) |
| Fertilizers | – Nitric acid and sulfonitric acids (28080000) – Ammonia, anhydrous or in aqueous solution (2814) – Potassium nitrate (28342100) – Mineral nitrogen fertilizers (3102) – NPK compound fertilizers (3105) |
Carbon dioxide (CO₂) Nitrous oxide (N₂O) |
| Iron and Steel Products | – Iron and steel (Chapter 72) – Sintered iron ores and concentrates (26011200) – Steel sheet piling (7301) – Railway steel materials (7302) – Cast iron pipes (730300) – Seamless steel pipes (7304) – Circular steel pipes (7305) – Other steel pipes (7306) – Steel pipe fittings (7307) – Steel structures (7308) – Steel containers >300L (730900) – Steel containers ≤300L (7310) – Steel containers for LPG (731100) – Screws and bolts (7318) – Other steel products (7326) |
Carbon dioxide (CO₂) |
| Aluminum and Products | – Unwrought aluminum (7601) – Aluminum powder (7603) – Aluminum bars, rods, profiles (7604) – Aluminum wire (7605) – Aluminum plates, sheets, strips (7606) – Aluminum foil (7607) – Aluminum tubes (7608) – Aluminum tube fittings (76090000) – Aluminum structures and parts (7610) – Aluminum tanks and drums (76110000) – Small aluminum containers (7612) – Pressure aluminum vessels (76130000) – Aluminum stranded wire, cables (7614) – Other aluminum products (7616) |
Carbon dioxide (CO₂) |
| Fluorinated Gases | – Perfluorocarbons and hydrofluorocarbons | Fluorinated greenhouse gases (F-gases) |
Note: The scope of CBAM is expected to expand in the future to include additional sectors covered by the EU ETS, such as organic chemicals and polymers.
| Phase | Transitional Period (Oct 1, 2023 – Dec 31, 2025) | Definitive Period (From Jan 1, 2026 onward) |
| Governing Regulation | Implementing Regulation (EU) 2023/1773 | / |
| Responsible Entity | CBAM Reporter (EU importer or their indirect customs representative) | CBAM Authorized Declarant (Authorized EU importer or their indirect customs representative) |
| Responsibilities | Submit a CBAM report for the previous quarter by the end of the following month. The report must include:
1) Information on CBAM goods imported during the quarter; 2) Total embedded direct emissions; 3) Total embedded indirect emissions; 4) Carbon price paid in the country of origin (if applicable). |
Submit an annual CBAM declaration by May 31 for the previous calendar year, including:
1) Total quantity of CBAM goods imported; 2) Total embedded emissions; 3) Number of CBAM certificates to be surrendered (after deduction of carbon costs paid in the country of origin); 4) A copy of the verified emissions report. |
Non-EU exporters must cooperate by providing emissions data and supporting documentation for carbon accounting. To facilitate this process, the European Commission has released the official CBAM Communication Form—a standardized template for non-EU producers to share required emissions data with EU importers. While voluntary, this form helps ensure data consistency, completeness, and comparability.
Who Is an Authorized CBAM Declarant?
An Authorized CBAM Declarant is an EU importer (or indirect customs representative) licensed by the competent authority of a Member State. Once authorized, they can operate across all EU countries.
About CBAM Certificates
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Each certificate corresponds to 1 tone of CO₂-equivalent emissions
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Price is based on the average weekly EU ETS auction price
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Certificates are valid for two years
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Importers must surrender certificates annually and maintain a quarterly balance equal to at least 80% of cumulative emissions
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Buy-back option: Up to one-third of certificates purchased in the previous year can be sold back to the Commission at the original price
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Certificate cancellation: Unused certificates will be canceled without compensation by July 1 each year
Our Services
CBAM Compliance Training and Strategy
Embedded Emissions Calculation
CBAM Report/Declaration Assistance
CBAM System Registration and Reporting
Corporate Carbon Accounting
Why Choose Us?
As a pioneer in sustainability services, REACH24H brings:
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In-depth regulatory expertise on EU climate and trade policy
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A strong technical team of certified GHG verifiers, carbon label evaluators, and master’s graduates from the global top 50 universities
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Extensive experience in CBAM pilot cases, carbon inventory projects, and import/export compliance
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Accreditations including “Authorized Carbon Label Evaluator” and “AAA Low-Carbon Service Provider”
We serve as a bridge between enterprises, associations, and government bodies, enabling companies to seize green opportunities and realize sustainable growth amid the global shift toward low-carbon development. Please feel free to contact us.
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