The primary objective of CBAM is to prevent "carbon leakage." This occurs when companies move production to countries with less stringent environmental policies or when EU/UK products are replaced by more carbon-intensive imports. To level the playing field, CBAM applies a carbon price to imports of specific goods, equivalent to the price paid by domestic producers under the Emissions Trading System (ETS).
As of 1 January 2026, the EU CBAM has entered its definitive period. For importers into the EU, the "reporting-only" grace period is over. Businesses must now:
The UK government has confirmed its own CBAM will be implemented in 2027. While the sectors largely mirror the EU model—including iron, steel, aluminium, fertilizers, and cement—the UK regime includes specific nuances, such as the inclusion of ceramics and glass. For UK-based firms, 2026 is the critical window for establishing the data infrastructure required to meet both EU export requirements and upcoming domestic import liabilities.
CBAM is governed by Combined Nomenclature (CN) codes. If your products fall under the following categories, you have a mandatory obligation to report and, in the EU’s case, pay.
CBAM does not just look at the direct emissions from a factory chimney (Scope 1). It requires a granular breakdown of:
In 2026, the financial implications of CBAM shift from "projected" to "actual." The cost is calculated based on the total embedded emissions (CO2e) multiplied by the current price of carbon certificates.
During the transitional phase, many firms relied on "default values" provided by the European Commission. In the definitive phase, the use of default values is strictly limited. If a business cannot provide actual, verified data from their manufacturer, they are forced to use the "worst-performing" default values—often the top 10% of the most carbon-intensive producers.
This can result in a carbon tax liability that is 30% to 50% higher than the actual footprint of the product. Accurate data is no longer just a compliance requirement; it is a cost-reduction strategy.
We begin with a comprehensive review of your import/export history.
The most significant challenge for most B2B firms is obtaining accurate data from overseas manufacturers who may not be familiar with EU/UK standards.
The administrative requirement of CBAM is heavy. We manage the end-to-end filing process:
Once compliance is established, we focus on mitigation.
Many consultancies approach CBAM as a broad "sustainability" goal. At Enviropass, we treat it as a customs and tax reality. Our approach is grounded in:
In 2026, it is both. You must report the emissions and purchase "CBAM certificates" to cover those emissions. It functions effectively as a border tax on carbon.
Yes. While the UK is no longer in the EU, its exports are subject to EU CBAM. Your EU-based customers will require you to provide verified emissions data so they can complete their filings.
From 2027, you will likely be subject to the UK CBAM. If you are importing these goods via an EU entity, you are already subject to the EU CBAM as of 2026.
No. As of 2026, the use of "default values" or secondary data is strictly limited. You must provide actual data from the specific installation (factory) where the goods were produced.
The price is tied to the weekly average auction price of the EU Emissions Trading System (ETS). It fluctuates based on the market.
It is the person or company authorized by the customs authorities of an EU Member State to import CBAM-in-scope goods. You must apply for this status; it is not automatic.
The de minimis exemption applies to consignments where the total value of the in-scope CBAM goods does not exceed €150.
These are emissions from the electricity consumed during the manufacturing process. Currently, these are monitored for all sectors but only "paid for" in certain sectors like cement and fertilizers.
You need certified documentation from the producer showing that a carbon tax or ETS price was paid in the country of origin, and that they haven't received a rebate or export subsidy for it.
This is a major commercial risk. Without their data, you must use punitive default values, which will significantly increase your certificate costs. You may need to reconsider your supply chain or include data-sharing clauses in your contracts.
Yes. Hydrogen was added to ensure that "grey" hydrogen imports do not undermine the EU’s transition to green hydrogen.
Not in the traditional sense. It covers the "embedded emissions" of the product, which includes direct emissions (Scope 1), certain indirect emissions (Scope 2), and the emissions from specific precursors (which would be Scope 3 for the importer).
The annual declaration for the preceding year must be submitted by 31 May. For example, your 2026 data must be submitted by 31 May 2027.
Yes, but there are limits. You cannot "hoard" certificates indefinitely. There are rules regarding the surrender and the re-selling of excess certificates back to the Commission.
You must maintain records for at least 7 years from the end of the year in which the declaration was submitted.
Mostly, but there are differences. The UK version includes ceramics and glass, which are currently not in the EU CBAM.
Yes. In the definitive phase (now), emissions data must be verified by an accredited independent verifier before the report is submitted.
Penalties are set by individual EU Member States but generally range from €10 to €50 per tonne of CO2. These fines can accumulate quickly for high-volume importers.
A "complex good" is one that uses other CBAM-covered materials in its production. You must calculate the emissions of the production process plus the embedded emissions of the precursors. Enviropass specializes in these technical calculations.
Yes. The European Commission intends to include all sectors covered by the EU ETS by 2030, which could eventually include organic chemicals and polymers (plastics).
Generally, no. CBAM has very specific rules about the use of Power Purchase Agreements (PPAs) and grid averages. Usually, you must use the grid factor of the country of origin unless you have a direct line to a renewable source.
We offer tiered pricing based on the complexity of your supply chain, the number of CN codes in scope, and whether you require full registry management or just technical data verification.
