What Does the CABAM mean for companies?

Kris Verbeeck:
The Carbon Border Adjustment Mechanism (CBAM) is a European measure that ensures imported products bear the same carbon costs as products manufactured within the EU.

Kris, what exactly is CBAM?

Kris Verbeeck:
The Carbon Border Adjustment Mechanism (CBAM) is an instrument of the European Union designed to prevent carbon leakage. This occurs when companies relocate production to countries with less stringent climate regulations, undermining the effectiveness of European climate policy.
 
CBAM imposes a carbon price on certain imported goods based on their CO₂ emissions. Importers must report on the emissions associated with their products and purchase certificates corresponding to these emissions.
 
The measure is closely linked to the EU Emissions Trading System (ETS) and ensures that both European and non-European producers bear a comparable carbon cost.
 
Which companies must comply with CBAM?

Kris Verbeeck:
CBAM applies to companies importing certain carbon-intensive goods into the European Union. Initially, the sectors concerned are:

• Cement,

• ​Iron and steel,

• Aluminium,

• Fertilisers,

• Electricity,

• ​Hydrogen.

 
Every company importing these goods into the EU is responsible for CBAM obligations, regardless of company size. This means that SMEs that import may also fall under the regulation.
 
Since October 2023, CBAM has been in a transitional phase, during which companies are required to report quarterly on the embedded emissions of their imports, without any financial obligations yet. From 2026, the definitive phase begins, in which importers must purchase CBAM certificates.


What is the goal of the CBAM?

Kris Verbeeck:

The primary purpose of CBAM is to prevent carbon leakage and protect the competitive position of European companies subject to the ETS. In addition, CBAM incentivises producers outside the EU to make their production processes more sustainable, as carbon-intensive products become more expensive when imported into the EU.

 

In this way, CBAM contributes to the global reduction of greenhouse gas emissions and supports the E

What reporting obligations must companies comply with?

Kris Verbeeck:

During the transitional period (2023–2025), importers must report quarterly on:

• The quantity of imported goods,

• The direct and – where relevant – indirect emissions associated with production,

• Any carbon prices already paid in the country of origin.

 

From 2026, companies must submit annual CBAM declarations and purchase CBAM certificates based on the reported emissions. The calculation of emissions must follow methodologies established by the European Commission, with an increasing shift from default values to actual supplier emission data.
 

How can companies prepare for CBAM?

Kris Verbeeck:

Companies can prepare for CBAM by first mapping whether and to what extent they fall under the regulation, in particular by analysing their import flows and the products involved.

It is then crucial to work with suppliers to collect reliable emission data. This often requires new processes, systems and contractual arrangements within the value chain. It is also important to clearly define internal responsibilities and establish reporting processes that meet CBAM requirements.

 

Finally, companies can take a strategic look at alternative suppliers, production optimisations or decarbonisation initiatives to limit future costs and remain competitive.

Where can companies find more information about CBAM?

Kris Verbeeck:

More information about CBAM is available on the European Commission website, where guidelines, methodologies and practical manuals are also published.

 

In addition, the European CBAM Transitional Registry offers support for reporting during the transitional period. Of course, we at Sustinera are ready to guide companies in the implementation and strategic impact of CBAM.