Regulation & framework

CBAM

An EU mechanism that puts a carbon price on certain goods imported into the bloc, matched to what the producer would have paid had they made the goods inside the EU. It covers carbon-intensive categories including iron and steel, cement, aluminium, fertilisers, electricity and hydrogen.

CoreEUDefinitive regime from 2026well covered

What it is

CBAM is the first mechanism that makes embedded emissions directly financial rather than merely disclosable. Importers of covered goods must report the emissions embedded in them and, once the definitive regime applies, surrender certificates priced against the EU carbon market. The reach is wider than the list of covered goods suggests. If you supply a European manufacturer with covered inputs, your emissions data becomes their compliance obligation — which makes it their procurement criterion, which makes it your commercial problem. The practical difficulty is that CBAM asks for emissions at product level, not company level. Most suppliers can produce a corporate footprint; far fewer can attribute emissions to a specific consignment. That gap between what is asked for and what exists is where most of the current effort is going.

Why it matters

It converts a supplier's emissions into your landed cost. If you import covered goods into the EU — or sell to someone who does — the emissions embedded in what you ship stop being a reporting detail and become a price.

How it connects

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