In just weeks, the Carbon Border Adjustment Mechanism (CBAM) transitions from the transitional reporting period to the definitive period. For EU importers, this means moving from quarterly reports to actual carbon payments.
What Changes on January 1, 2026?
The definitive period introduces three major changes:
1. CBAM Certificate Purchases Required
Unlike the transitional period where you only reported emissions, you'll now need to purchase CBAM certificates to cover the embedded emissions in your imports.
How it works:
- Each certificate represents 1 tonne of CO₂e
- Price linked to EU ETS weekly average
- Current price: approximately €80/tonne
- Must be purchased by May 31 each year for previous year's imports
2. Free Allocation Phase-Out Begins
To align with EU ETS free allocation phase-out, CBAM introduces a gradual reduction:
- 2026: 97.5% free allocation (you pay on 2.5% of emissions)
- 2027: 95% free allocation (you pay on 5%)
- 2030: 70% free allocation (you pay on 30%)
- 2034: 0% free allocation (you pay on 100%)
This means for a shipment of 1,000 tonnes of steel with 2.5 tCO₂e/tonne:
- 2026 cost: €5,000 (2.5% × 2,500 tCO₂e × €80)
- 2034 cost: €200,000 (100% × 2,500 tCO₂e × €80)
3. Authorized Declarant Registration
You must register as an authorized CBAM declarant to import CBAM-regulated goods.
Five Actions to Take Before January 1
1. Register as Authorized Declarant
Deadline: Before your first 2026 import
Access the CBAM Registry portal, provide company details and EU EORI number, and submit any required financial guarantee.
2. Review Your Supplier Data
The transitional period data gives you a baseline. Assess data quality, cost impact, and whether verification would reduce costs enough to justify the expense.
3. Budget for CBAM Costs
CBAM costs are now a real expense. Update your 2026 budget using the formula:
CBAM Cost = Import Volume × Emission Factor × Payable % × ETS Price
4. Engage Your Suppliers
Start conversations about:
- Emissions data quality (actual vs. defaults)
- Verification options
- Cost sharing arrangements
- Implementation timeline
5. Implement Tracking Systems
You'll need to track import volumes by CN code, emissions per shipment, CBAM certificates purchased, and annual declaration data.
Common Questions
Q: What if I don't register as an authorized declarant? A: You cannot import CBAM-regulated goods without authorization. Customs will block your shipments.
Q: Should I verify supplier data or use defaults? A: Use our calculator to compare costs. Generally, verification makes sense when import volumes exceed 500 tonnes/year and supplier emissions are likely 20% below defaults.
The Bottom Line
CBAM is happening. January 1, 2026 is not a soft deadline - it's a hard regulatory requirement with financial and legal consequences.
Use the next weeks to:
- Register as authorized declarant
- Calculate your 2026 costs
- Engage suppliers about verification
- Set up tracking systems