---
term: "Carbon Border Adjustment Mechanism (CBAM)"
aliases: ["CBAM", "EU CBAM", "carbon border tax"]
category: Regulation
updated: 2026-09-08
canonical: https://verdatir.com/glossary/cbam
publisher: Verdatir (https://verdatir.com)
---

# Carbon Border Adjustment Mechanism (CBAM)

> The EU regulation that puts a carbon price on the embedded emissions of certain imported goods, so that importers pay the equivalent of what EU producers pay under the EU Emissions Trading System.

The Carbon Border Adjustment Mechanism (CBAM) is established by Regulation (EU) 2023/956. Its purpose is to prevent carbon leakage: as the EU tightens its Emissions Trading System, CBAM ensures that imports of carbon-intensive goods carry an equivalent carbon cost.

## Scope

CBAM initially covers cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, together with certain precursors and downstream products. Importers must report the embedded emissions of covered goods and, in the definitive phase, surrender CBAM certificates whose price tracks the EU ETS allowance price.

## Timeline

A transitional period with reporting-only obligations ran from October 2023 to the end of 2025. The definitive phase, with financial obligations, began on 1 January 2026. Our Insights article on the 2026 certificate price and playbook covers the current prices, deadlines and open negotiations.

## Data requirements

CBAM obligations depend on installation-level emissions data from non-EU producers, calculated according to the Commission's methodology, or on default values where actual data are unavailable. That makes verified, traceable supplier emissions data a compliance asset rather than a nice-to-have.

## Where Verdatir fits

Verdatir validates supplier emissions data for CBAM submissions, aligns it with the reporting methodology and keeps a regulator-ready audit trail of every value and its source.

## Sources

- [Regulation (EU) 2023/956 establishing a carbon border adjustment mechanism](https://eur-lex.europa.eu/eli/reg/2023/956/oj)
- [European Commission — Carbon Border Adjustment Mechanism](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en)