CBAM Definitive Period: A Practical Guide for EU Importers and Non-EU Producers
CBAM scope, the 50-tonne threshold, embedded emissions data, verification, certificate prices, and the potential impact of the 17 July 2026 EU ETS proposal on the system.
What Is CBAM and What Does It Aim to Achieve?
The Carbon Border Adjustment Mechanism (CBAM) aims to apply a cost signal equivalent to the EU carbon price to certain carbon-intensive goods imported into the European Union from non-EU countries.
CBAM complements the EU ETS and aims to reduce the risk of production or investment shifting to countries with lower carbon costs.
CBAM is not a general customs tariff applied to all countries. It is a product- and emissions-based system.
The key question is how much greenhouse gas emissions are embedded in the imported product.
The calculation may also take into account free allocations still available for comparable EU production and eligible carbon prices actually paid in the country of origin.
The transitional period ran from October 2023 to December 2025 and focused on quarterly reporting without any obligation to surrender certificates.
The definitive period began on 1 January 2026.
With this period, authorisation, annual declarations, verification, certificate purchasing, and certificate surrender have become part of a single compliance cycle.
Which Products and Sectors Does CBAM Cover?
CBAM currently covers certain products in six main sectors:
- Cement
- Iron and steel
- Aluminium
- Fertilisers
- Electricity
- Hydrogen
Certain precursor and downstream products specified by Combined Nomenclature (CN) codes in Annex I of the CBAM Regulation are also covered.
Companies should not determine CBAM scope solely based on the commercial name of a product.
For example, two products described as “steel components” may have different CN codes, production processes, and emissions boundaries.
Therefore, customs classification, origin, and import procedures should be assessed together.
50-Tonne De Minimis Threshold
During the definitive period, an exemption from CBAM obligations may apply if the total net weight of covered goods imported by an importer during a calendar year does not exceed the specified threshold.
The current threshold is 50 tonnes.
However, importantly, this threshold is not applied separately to each product or shipment.
The 50-tonne threshold is calculated collectively across all covered CN codes imported by the same importer throughout the year.
If the importer exceeds the threshold at any point during the year, CBAM obligations apply to all covered imports made during that calendar year.
This also includes imports made before the threshold was exceeded.
For example, if the same importer imports 30 tonnes of covered aluminium products and 25 tonnes of covered steel products, the total quantity may exceed the current threshold even though neither product category individually reaches 50 tonnes.
Electricity and hydrogen cannot benefit from the de minimis exemption.
Who Is Responsible for What in the CBAM Process?
Importer / Indirect Customs Representative
Ensures that goods are imported under the correct authorised declarant structure and that customs data is accurate.
Authorised CBAM Declarant
Submits the annual CBAM declaration, purchases and surrenders certificates, and maintains the required accounts and documentation.
Non-EU Installation Operator
Monitors production emissions, maintains the monitoring plan, and provides customers with reliable product-level emissions data.
Accredited Verifier
Verifies actual embedded emissions data used under the definitive period rules.
National Competent Authority / European Commission
Manages authorisation, the registry, certificate platform, controls, and enforcement processes.
Non-EU producers are normally not responsible for purchasing and surrendering CBAM certificates.
However, the data provided by the producer directly affects the importer’s CBAM costs.
A producer unable to provide usable and verified emissions data may cause the importer to rely on default values. This may weaken price negotiations and encourage the importer to choose another supplier capable of providing more transparent emissions data.
Monitoring and Verification of Embedded Emissions
The operator of a non-EU installation should establish a comprehensive monitoring plan.
This plan should define:
- Production processes,
- Emission sources,
- Measurement systems,
- Emission factors,
- Electricity data,
- Production volumes,
- Precursor products,
- How emissions are attributed to CBAM products.
Records and supporting documents generally need to be retained for at least six years after the reporting period.
Actual embedded emissions values used during the definitive period must be verified by an appropriately accredited verifier.
Where actual data is unavailable or does not meet regulatory requirements, default values may be used.
Default values are not necessarily punitive in every case. However, relying on them may prevent a supplier from demonstrating a lower-carbon production process.
Indirect emissions are included only where CBAM legislation brings them within scope for the relevant product or precursor.
Companies should therefore not apply a single general “Scope 1 + Scope 2” formula to all products.
How Do CBAM Certificates Work?
The price of a CBAM certificate is linked to EU ETS auction prices.
For goods imported in 2026, the European Commission publishes a price for each quarter.
The first two published values are:
2026 Q1: EUR 75.36
2026 Q2: EUR 75.28
Certificate sales will begin in February 2027 through the Common Central Platform.
Authorised CBAM declarants will access this platform through the CBAM Registry.
Certificates corresponding to 2026 imports must be purchased and surrendered by 30 September 2027.
From 2027 onwards, certificate prices will be published weekly instead of quarterly.
CBAM certificates are not freely traded carbon assets.
They cannot be freely sold or transferred between declarants.
Therefore, the certificate purchasing process differs from speculative secondary-market trading in the EUA market. It is a compliance and cash management process linked to the importer’s own account and obligations.
Key CBAM Dates
Start of the definitive period: 1 January 2026
2026 Q1 reference certificate price: EUR 75.36
2026 Q2 reference certificate price: EUR 75.28
Start of certificate sales: February 2027
First declaration and certificate surrender deadline for 2026 imports: 30 September 2027
Quarterly minimum certificate holding requirement from 2027: 50% of cumulative embedded emissions
Simplified CBAM Obligation Calculation
The final CBAM calculation is product-specific, but the commercial logic can be explained in four main steps:
- Determine the quantity of imported CBAM goods and the relevant production period.
- Multiply the quantity by the verified actual embedded emissions value or applicable default value.
- Apply the adjustment reflecting the remaining free allocation for comparable EU production.
- Deduct from the certificate obligation any eligible carbon price actually paid for the relevant embedded emissions in the country of origin, supported by the required evidence.
Example Calculation
Assume that 1,000 tonnes of imported goods result in a net CBAM obligation of 0.30 tCO2e per tonne after all adjustments.
Total obligation:
1,000 × 0.30 = 300 CBAM certificates
Using the 2026 Q2 certificate price of EUR 75.28, the indicative cost would be:
300 × EUR 75.28 = EUR 22,584
This is only an illustrative calculation.
The actual obligation will vary depending on the CN code, production method, benchmark, verification, indirect emissions scope, and evidence of carbon pricing in the country of origin.
Free Allocations and the CBAM Factor
CBAM is being phased in as free allocations provided to relevant products under the EU ETS are gradually phased out.
Therefore, during the first years of the definitive period, CBAM calculations include a significant free allocation adjustment.
Under current legislation, the CBAM factor is:
2026: 97.5%
2027: 95.0%
2028: 90.0%
2029: 77.5%
2030: 51.5%
2031: 39.0%
2032: 26.5%
2033: 14.0%
2034: 0%
A lower factor means a smaller free allocation adjustment and, all else being equal, a larger share of embedded emissions subject to CBAM certificates.
How Could the 17 July 2026 EU ETS Proposal Change CBAM?
Important: This change is not yet in force.
The European Commission has proposed slowing the phase-out of free allocations in CBAM sectors and extending the end of the process from 2034 to 2038.
If adopted, the rate at which importers’ CBAM exposure increases between 2026 and the late 2030s could slow.
At the same time, EU producers could continue receiving free allocation support for a longer period during the industrial transition.
However, the proposal does not eliminate CBAM. It only changes the timing between the gradual introduction of CBAM and the phase-out of free allocations.
Importers and suppliers should therefore maintain two separate financial scenarios:
- Current legislation: Full exposure in 2034
- Proposed scenario: Transition extended to 2038
Until the 17 July 2026 proposal becomes law, companies should continue complying and budgeting according to the current legislation.
14 August 2026 Guidance Package
On 14 August 2026, the European Commission published ten guidance documents covering the definitive period.
Four general guides cover:
- CBAM fundamentals
- Quick guide for non-EU operators
- Embedded emissions calculations
- Free allocation adjustment
Six sector-specific guides cover:
- Cement
- Iron and steel
- Aluminium
- Fertilisers
- Hydrogen
- Electricity
These guides are particularly important for non-EU producers. During the definitive period, a general company-level emissions report alone is not sufficient.
Operators need installation-, product-, and production-route-specific data that can be traced to exported products and verified according to the relevant rules.
Commercial Implications for EU Importers
Landed Cost
Purchasing decisions should include not only customs value and transportation costs but also the expected CBAM certificate obligation.
Working Capital
Imports made in 2026 will create a certificate purchasing requirement in 2027.
Supplier Comparison
Verified low-emission data can become a commercial advantage by reducing CBAM costs and the risk associated with default values.
Contracts
Purchase agreements should clearly require suppliers to provide the necessary emissions data on time, grant verifier access, and make corrections when required.
Threshold Monitoring
Companies should correctly identify the legal importer and monitor the total net weight of covered goods across CN codes in real time.
Audit Trail
Customs, purchasing, sustainability, finance, and tax data should be consistent with a single annual CBAM declaration.
Commercial Implications for Non-EU Producers
- Treat CBAM data as part of the product specification.
- Build your monitoring plan around actual production processes and precursor product chains.
- Secure accredited verification capacity early.
- Document carbon prices actually paid in the country of origin and any relevant rebates.
- Make verified low-emission performance part of your sales strategy.
- Clearly allocate contractual risks associated with data that may later prove incomplete or inaccurate.
Practical CBAM Preparation Checklist
- Create a list of all imported or exported products including CN code, origin, importer identity, quantity, and production route.
- Track the cumulative 50-tonne threshold by importer and calendar year.
- Verify Authorised CBAM Declarant status and indirect customs representative arrangements.
- Obtain monitoring plans, embedded emissions files, precursor data, and verification status from suppliers.
- Determine which products include indirect emissions within their CBAM scope.
- Establish the necessary evidence for carbon prices actually paid in the country of origin.
- Accrue certificate costs according to the correct quarter of import and the price published by the Commission.
- Plan cash requirements between February and September 2027 and the first annual certificate surrender for 2026 imports.
- Retain the required records and align customs, purchasing, finance, and sustainability systems.
- Maintain separate scenarios for current legislation and the 17 July proposal until the legislative process is completed.
Frequently Asked Questions
Is the 50-tonne threshold applied separately to each CN code?
No. The current threshold aggregates the net weight of all covered goods imported by the same importer during the calendar year across CN codes.
What happens if the threshold is exceeded later in the year?
The importer becomes subject to CBAM obligations for all covered imports made during that calendar year. This includes shipments made before the threshold was exceeded.
Can a non-EU producer purchase CBAM certificates on behalf of its customer?
The Authorised CBAM Declarant is responsible for purchasing and surrendering certificates. The producer may contractually support or cover the cost, but cannot replace the declarant’s regulatory responsibility.
Can a carbon tax paid in the country of origin be deducted?
If the relevant conditions are met and appropriate evidence is provided, the carbon price actually paid for the declared embedded emissions may be taken into account.
Are 2026 imports free because certificates only go on sale in 2027?
No. Imports made in 2026 create a financial obligation. Certificates relating to these imports are purchased from February 2027 and surrendered by 30 September 2027.
Will Full CBAM Exposure Begin in 2034 or 2038?
Under current legislation, the free allocation adjustment ends in 2034.
On 17 July 2026, the European Commission proposed extending the process to 2038, but this change is not yet in force.
Important Disclaimer
This article is for general informational purposes only. It does not constitute legal, tax, investment, or trading advice. Organisations should verify current legislation, guidance from competent authorities, contractual obligations, and their own risk limits before taking any action.