CBAM information

CBAM is the European Union’s tool designed to establish a fair balance in carbon pricing between goods produced in the EU and those imported from outside the EU. Companies must purchase CBAM certificates, the price of which is based on the EU ETS auction prices.

CBAM initially applies to high-emission goods such as electricity, cement, hydrogen, iron, steel and aluminium, as well as to fasteners made of corresponding materials. The requirement to purchase CBAM certificates is designed to prevent the risk of carbon leakage for these goods. From 2026, the affected goods may only be imported into the EU by approved CBAM declarants.

Carbon leakage occurs when companies relocate production activities to countries with weaker environmental regulations and lower carbon pricing. Instead of reducing greenhouse gas emissions, however, this only shifts them – often even increasing them. At the same time, companies within the EU are at a competitive disadvantage. The idea behind CBAM is to redress this imbalance by creating a comparable carbon cost burden for certain imported goods.

In order to support global decarbonisation efforts, the European Union wants to reduce its own greenhouse gas emissions by at least 55 per cent by 2030. The EU is set to achieve climate neutrality by 2050. To this end, the ‘Fit for 55’ package was adopted with a set of legislative acts and implementing regulations designed to ensure that the path to climate neutrality is socially fair while guaranteeing the competitiveness of EU industry. CBAM also constitutes part of these measures, the idea being that it provides incentives to reduce carbon emissions worldwide.

CBAM currently affects electricity, cement, iron, steel, aluminium, fertilisers and hydrogen in accordance with the CN codes listed in Annex I of Regulation (EU) 2023/956, plus – as one of the few downstream products – fasteners made of these materials. Importers of these goods must register as CBAM declarants and comply with the obligations set out in the Regulation.

This essentially applies to all of REYHER’s market competitors as well as all companies in the European area that import such goods from third countries.

The CBAM system was introduced on 1 October 2023 with a transitional phase during which there were only reporting requirements, with no certificates having to be purchased or surrendered (= as proof).

The definitive phase began on 1 January 2026. All goods that are covered by the CBAM legislation and imported from this date onwards are subject to a requirement to purchase CBAM certificates and surrender them (= provide proof of purchase). However, the option to purchase these certificates (= acquisition phase) for goods imported on or after this date (1 January 2026) will not be available to importers until 1 February 2027.

Acquired certificates are surrendered (= proof is provided) based on the CBAM declaration for 2026 that will need to be submitted in 2027 in the so-called submission phase that runs until 30 September 2027.

While the CBAM factor – which reflects the incremental phase-out of the free allocation of allowances under the EU Emissions Trading System – will be gradually cut to zero by 2034, it is uncertain how certificate prices, which are based on the EU ETS auction price, will develop.

Since the start of the transitional phase on 1 October 2023, importers or indirect customs representatives have been required to report quarterly information to the EU on the products they import and the emissions generated during production.

With the definitive phase finally entering into force on 1 January 2026, additional requirements to acquire CBAM certificates will apply; certificates for 2026 imports, however, will only be purchased retroactively from 1 February 2027.

Emission data must be verified by accredited, independent auditors. Among other things, the requirements for this are derived from Delegated Regulation (EU) 2025/2551, although its implementing regulations have not yet been issued. (As of 02/2026)

As long as no permissible actual emission values are (or may be) used, the default values specified in Implementing Regulation (EU) 2025/2621 will apply.

The number of certificates to be purchased is calculated based on the system governed by Regulation (EU) 2023/956 and the implementing acts issued thereunder; the price of CBAM allowances is determined in line with Implementing Regulation (EU) 2025/2548.

The simplified formula is as follows:
(Reported emissions – (CBAM benchmark x CBAM factor)) x import in tonnes = number of certificates

A diagram of the calculation as well as a sample sum with the CBAM factor valid for 2026 can be found  here

The CBAM benchmark is derived from the average value of European carbon emissions generated in the production of one tonne of fasteners. A distinction is made based on the individual CN codes.

The CBAM factor is a tool used in the definitive phase since 2026 to gradually phase out the free certificates issued under the EU ETS by 2034. As the CBAM factor decreases, so does the free allocation percentage, which means that an increasing volume of emissions must incrementally be covered by CBAM certificates. 

In 2026, a CBAM factor of 97.5 per cent will initially apply. The factor will fall to 95 per cent in 2027, to 90 per cent in 2028, and so on, falling to 14 per cent by 2033 and finally to 0 per cent by 2034. Accordingly, all emissions will have to be covered by CBAM certificates from 2034 onwards.

An overview of how the CBAM factor will change over time and a sample comparative calculation with the certificate price of €80.00 currently assumed for 2026 can be found here

CBAM does not apply to certain countries of origin if they participate in the EU Emissions Trading System or use a carbon pricing system that is recognised as being equivalent.

This currently pertains to Norway, Iceland, Liechtenstein and Switzerland.

In addition, the CBAM Regulation contains narrowly defined special provisions in exceptional cases with security relevance; however, there is no blanket exemption for military or NATO-related goods.