Carbon Border Adjustment Mechanism (CBAM)

What is CBAM?

Carbon Border Adjustment Mechanism (CBAM) is a key tool in EU's fight against climate change and in the goal of achieving net zero emissions. CBAM is intended to ensure that companies outside the EU are subject to the same requirements as European companies. This means that importers of certain goods into the EU must purchase CBAM certificates to ensure that the imported goods meet the same strict environmental standards as goods produced within the EU. If the goods have higher CO2 emissions, the importers must pay the difference.

CBAM is designed to ensure that companies inside and outside the EU compete with equal terms. This is achieved by imposing a price on imports as of 2026 – after the phase-in period – of goods produced outside the EU with high CO2 emissions. 

Which sectors are included? 

The regulation requires companies importing goods to report the embodied CO2 emissions of products within the following carbon intensive industries: 

  • Iron 
  • Steel 
  • Aluminium
  • Cement 
  • Fertiliser
  • Electricity and Hydrogen 

Far reaching scope and ambitious implementation timeframes

The scope of CBAM is far reaching. Currently, the only exclusions are for goods whose individual value per consignment does not exceed the “de minimis threshold” of €150. The timeline for implementation is also ambitious. As of 1st January 2026, CBAM requires importers to declare the quantity of imported goods as well as their embodied CO2 emissions from the previous year. They must also purchase CBAM certificates which match with these calculated emissions. From the beginning of 2026 there would also be financial sanctions for missing or erroneous reporting.

Recent developments and uncertainty

In recent weeks The European Commission have a proposed changes to CBAM with the aim of simplifying existing EU sustainability regulations and reducing the administrative burdens placed on businesses.

These changes come in the form of the "Omnibus" package, introduced by The European Commission on February 26th 2025. The package has potentially significant implications for CBAM. These include a proposed reduction in scope, changes to the methodologies accepted to calculate emissions, an extension of the transitional period and a change to the annual deadline for submitting CBAM declarations.  

At this stage the Omnibus package is a proposal, but it is a proposal that could result in far reaching changes to CBAM. However, the timescale for when finalised legislation will be implemented and the shape of any amendments that may occur during the consultation period are difficult to predict. 

Bureau Veritas can support in this uncertain environment

Making business decisions in this uncertain environment comes with many challenges. However, Bureau Veritas can support your company in understanding the implications of CBAM for your operations. 

In response to the Omnibus Package, on 11th and 13th March, Bureau Veritas conducted webinars providing critical insights on the Omnibus package’s impact on CBAM (CSRD, CSDDD and EU Taxonomy), actionable strategies to leverage these changes for sustainable growth and strategic voluntary reporting tips to fast-track companies’ sustainability goals.

In addition, Bureau Veritas continue to offer gap assessments to importers and exporters on companies’ CBAM readiness for both the administrative and technical requirements of the legislation, in its current and proposed form. 

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