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EU CBAM: An overview and key dates

The EU Carbon Border Adjustment Mechanism (CBAM) is one of the most significant trade and regulatory developments to affect businesses trading with the European Union in recent years. It is designed to address carbon leakage while supporting the EU’s wider climate objectives under the European Green Deal. In this article we provide an introduction to CBAM and look at the timeline for implementation.

Glass globe resting on green leaves.

Although CBAM is an EU measure, (until 2027 when it becomes a UK measure also) its impact extends well beyond EU borders. Any business exporting certain goods into the EU, including many UK and Northern Ireland operators, needs to understand what CBAM is, who it affects and, critically, how to prepare.

What is CBAM?

CBAM places a carbon cost on certain imported goods (usually at a cheaper cost) to ensure they face a similar carbon price (increasing import price) to products manufactured within the EU under the EU Emissions Trading System (EU ETS). In essence, it aims to level the playing field between EU producers and non‑EU producers by reflecting the embedded emissions associated with the manufacture of specific products.

Rather than introducing a traditional import tariff, CBAM operates through a system of reporting and, ultimately, the purchase of CBAM certificates linked to the carbon intensity of the goods concerned. The price of these certificates mirrors the prevailing EU ETS carbon price.

CBAM does not apply to all products. It is targeted at sectors considered most at risk of carbon leakage and which are already subject to carbon pricing within the EU.

Which industries are affected by CBAM?

CBAM initially applies to a defined list of goods and sectors, covering both raw materials and certain processed products. The current scope includes cement, iron and steel (including some downstream products such as tubes, pipes and certain fabricated items), aluminium, fertilisers, electricity and hydrogen.

For many businesses, the impact may not be immediately obvious. Even if you are not producing these goods yourself, CBAM can affect you if they form part of your supply chain or are embedded in the products you export/import to the EU.

CBAM focuses primarily on the direct emissions generated during the production process. Over time, the scope is expected to widen to include certain indirect emissions and potentially additional sectors, making early engagement important.

What is the CBAM timeframe?

CBAM is being introduced in stages to allow businesses time to adapt.

The transitional phase ran from 1 October 2023 to 31 December 2025. During this period, EU importers were required to submit quarterly CBAM reports detailing the embedded emissions of in‑scope goods imported into the EU. There was no financial charge during the transitional phase, but accurate data collection and reporting was mandatory.

From 1 January 2026, CBAM moved into its definitive phase. Reporting continues, but EU importers must also purchase and surrender CBAM certificates corresponding to the embedded emissions of the goods they import, once these become available.

As of 7 April 2026 the first price of 2026 Q1 certificates was released, this is based on an average price of EUETS in Q1 and was published as €75.36 per certificate. The certificate price reflects the EU ETS carbon price, with allowances made where a verifiable carbon price has already been paid in the country of origin.

What does CBAM mean for UK and Northern Ireland businesses?

Although CBAM is an EU regulation, it has direct implications for UK and Northern Ireland businesses exporting in-scope goods to the EU. EU importers will rely on their non‑EU suppliers to provide robust, auditable emissions data.

Where reliable data is not available, default values may be applied. These are often high and can increase the effective carbon cost, potentially making goods less competitive. In parallel, EU customers may favour suppliers who can demonstrate lower carbon intensity and a clear compliance approach.

How can I plan ahead for CBAM?

CBAM should not be viewed as a purely regulatory burden. For many businesses, it is an opportunity to gain a clearer understanding of carbon exposure across operations and supply chains, and to strengthen long‑term competitiveness in the EU market.

  • Start by confirming whether the goods you export/import to the EU fall within the current scope of CBAM, either directly or through the use of in‑scope materials. Map your supply chains and understand who acts as the EU importer of record.

  • Begin gathering reliable emissions data by engaging early with production teams and suppliers. Understanding how emissions are calculated and reported is critical to avoiding default values and unnecessary cost.

  • Review existing contracts and commercial terms to identify where CBAM‑related responsibilities and costs sit, and whether amendments may be needed as CBAM enters its definitive phase.

Given the technical nature of CBAM reporting and emissions methodology, many businesses are choosing to engage with certified CBAM training or advisory providers. Working with a specialist can help you navigate the complexity of the rules, build internal capability and reduce the risk of non‑compliance.

Do you need further help or advice?

 

Article reviewed by the InterTradeIreland Trade Hub Team: April 2026