What is CBAM? The EU Carbon Border Adjustment Mechanism explained
CBAM is the EU's carbon price on imports of certain goods — cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Here's how it works.
Published 19/10/2026 · Facts checked on 2026-10-18
Answer box
CBAM is the EU Carbon Border Adjustment Mechanism: a carbon price on imports of certain goods so they pay a similar cost to goods made inside the EU under the Emissions Trading System. The sectors in scope are cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. Its definitive period started on 1 January 2026.
Why it exists
The EU prices CO₂ for domestic producers. If imports came in without a similar price, EU-made goods would be at a disadvantage, and emissions could move abroad (so-called “carbon leakage”). CBAM equalises the price.
Who pays
The EU importer (or its indirect customs representative). Non-EU suppliers don’t pay CBAM — but they’re the only ones who have the real emissions data, so the system depends on them sharing it.
What’s in scope
Only specific CN codes within these sectors are in scope. Finished downstream goods (for example, cars) are not in CBAM today — a downstream extension was in trilogue as of October 2026 and is not yet law.
How much it costs
Specific embedded emissions × certificate price. Certificates track the EU ETS price. If you can’t get supplier data, you use default values plus a mark-up that grows every year (+10 %, +20 %, +30 %).
What CBAMWorks does
We get your non-EU suppliers to submit the data your declaration depends on — in their language, on their phone — and apply the EU method to get emissions per tonne per CN code.