From January 1, 2026, the EU CBAM enters its formal levy period. Companies exporting steel, aluminium, cement and more to the EU need to prepare three things now.
Transition Period Ends, Levy Period Begins
CBAM is the EU Carbon Border Adjustment Mechanism. 2023–2025 was the transition period, and the formal levy period begins on January 1, 2026.
It currently covers six categories: cement, aluminium, fertilisers, steel, hydrogen and electricity.
Expansion Direction Is Clear
The EU has proposed expanding coverage to steel- and aluminium-intensive downstream products from January 1, 2028.
On September 15, 2026, the European Parliament voted to extend it to 457 downstream products. Exporters of the relevant products should watch the list changes in advance.
How the Carbon Tariff Is Calculated
Carbon tariff = number of CBAM certificates × EU weekly average auction price − compliant carbon costs already paid in the country of origin.
Number of certificates = total carbon emissions of the taxable product − free allocation.
Calculations can be based on actual production data or on EU-published default values. Using actual data is usually more favourable, but requires complete, verifiable production data.
Why Data Is the Threshold
EU default values apply to all exporters and are usually on the high side; actual data better reflects true emissions.
But to use actual data, you need continuous metering, ledgers and third-party verification — it cannot be patched together at the last minute.
Who Declares in the EU
The importer or its appointed indirect customs representative must first obtain CBAM declarant authorisation.
Except for electricity and hydrogen, annual imports exceeding 50 tonnes trigger compliance obligations (this threshold applies to EU importers, not exporting companies).
Certificate purchases open from February 1, 2027, and importers must complete the previous year's declaration and settlement by September 30 each year.
Three Things Exporters Should Do
First, find out whether your products fall within CBAM coverage, including the future downstream expansion list.
Second, build a carbon emissions data ledger: embedded carbon emissions per unit of product, production processes, energy mix, third-party verification reports.
Third, give the data to the EU importer and confirm the basis for proving carbon costs already paid in the country of origin.
Chinese exporters do not declare directly, but must cooperate with importers by providing product embedded carbon emissions data, third-party verification reports, and proof of carbon costs already paid in the country of origin. If the data is incomplete, the importer cannot declare, and orders may be affected.
China's Official Position
The spokesperson of the Ministry of Commerce pointed out that the EU side has set significantly high baseline default values for the carbon emission intensity of Chinese products, constituting unfair and discriminatory treatment and suspected violation of the WTO principles of most-favoured-nation treatment and national treatment, and China expresses serious concern and firm opposition.
Policy changes are frequent; refer to the latest official announcement.
