Carbon Border Adjustment Mechanism (CBAM)

Why CBAM?

The European Union already has rules for pricing the CO2 emissions of certain goods. Some businesses have sourced their materials from outside Europe because such rules are either not in place or are less strict there. As a result, producers do not need to account for CO2 taxes when calculating their costs. The EU has labelled this situation as undesirable because production shifts outside Europe, which also contradicts the EU's environmental goals. Therefore, the EU is introducing a levy mechanism for the CO2 emissions of goods produced outside Europe.

How CBAM works

Businesses importing goods from outside the EU will be required to pay a levy for the CO2 emissions generated during the production of those goods.

Starting from 2026, businesses must cover these emissions using so-called CBAM certificates. One certificate represents one ton of CO2 emissions. The ultimate goal is for producers to adopt more environmentally friendly production methods, reducing global CO2 emissions.

Getting started with CBAM in 4 steps

1. Identify which goods are subject to the new rules.
2. Determine what information needs to be collected.
3. Develop a reliable administrative system for this new levy.
4. Register your business as a CBAM declarant.