CBAM Compliance Guide: What Every Exporter Must Know About the EU Carbon Border Tax
CBAM is a carbon border tax on imports. Costs depend on embedded emissions and the EU ETS price. For example, a 100,000t steel exporter could face a EUR 11.75M net liability.
Calculate Your CBAM Liability →What Is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is an EU regulation that places a carbon price on imports of certain carbon-intensive goods, equalizing the price of carbon between domestic products and imports.
For a broader overview of carbon regulations, see our Carbon & Trade Compliance pillar page.
Official Reference: EUR-Lex Regulation (EU) 2023/956.
Which Products Are Covered by CBAM?
| Sector | Embedded emissions calculation method |
|---|---|
| Iron & Steel | Direct and indirect emissions |
| Aluminium | Direct and indirect emissions |
| Cement | Direct emissions |
| Fertilisers | Direct and indirect emissions |
| Hydrogen | Direct emissions |
| Electricity | Direct emissions |
How Is CBAM Calculated?
The formula is: embedded emissions × (EU ETS price - carbon tax paid in exporting country). The EU ETS price fluctuates weekly.
CBAM Deadlines and Certificate Surrender
The first annual declaration is due May 31, 2027, and the first certificate surrender is due September 30, 2027.
How to Reduce Your CBAM Liability
You can reduce your liability by decarbonising production, using renewable energy, and properly documenting any carbon tax already paid in your home country.