Is your supply chain protected against the 31 March 2026 CBAM deadline?


To recall: what is CBAM?

CBAM stands for Carbon Border Adjustment Mechanism. It is a European instrument introduced by the European Commission as part of the European Green Deal.

CBAM aims to prevent “carbon leakage.” This refers to companies relocating production to countries outside the EU where climate regulations are less strict. Through CBAM, imported goods are charged based on their CO₂ emissions in a way comparable to goods produced within the EU under the EU Emissions Trading System (EU ETS).

Effectively, CBAM works by applying a charge on the import of certain goods that equalises the cost levied on carbon emissions embedded in those goods relative to the domestic EU carbon cost of producing them. The theory is that if the gross prices for imported goods are the same as those manufactured in the EU, the incentive for carbon leakage is removed. The CBAM-obligations lie with the importer or the indirect customs representative in case the importer is established outside the EU. If a customs representative acts as an indirect customs representative for an importer established in the EU, an opt-out mechanism exists whereby the CBAM obligations may be transferred from the indirect customs representative to the represented importer established in the EU. This opt-out is not possible in case of indirect representation of non-EU importers.


Initially, CBAM applies to imports into the EU for certain types of:

  • Aluminium
  • Cement
  • Electricity
  • Fertiliser
  • Hydrogen
  • Iron/Steel
However, in December 2025 the EU Commission proposed to expand the scope of CBAM starting January 1, 2028 by including specific steel and aluminium-intensive downstream products.


The obligations for importers of CBAM goods under the definitive regime

  • importers who import the above mentioned goods (also called CBAM-goods) need to apply for the status of authorized CBAM-declarant in case the 50 tonnes threshold is exceeded. When importing electricity and hydrogen, this threshold is not applicable;
  • a CBAM report needs to be submitted at the latest on 30 September of the year following the reference year. The first report that needs to be submitted will be the CBAM report of 2026, to be submitted by the 30th of September in 2027;
  • CBAM-importers will have to purchase CBAM certificates. For the imports during 2026, certificates can be purchased as from February 2027;
  • the price of these certificates is linked to the CO₂ price under the EU ETS. For 2026, the price of the certificates is based on the average EU ETS price of each quarter. As from 2027, certificates can be purchased on a spot-based basis;
  • the number of certificates to be surrendered is based on the embedded emissions of the imported goods;
  • as from calendar year 2027, CBAM-declarants are required to have purchased at least 50% of the required certificates at the end of each quarter;
  • the embedded emissions of the imported goods can be based on the default values set by the EU or on actual values verified by an accredited verifier. It should be noted that the official registry of accredited verifiers will only become operational in September 2026. Verification of actual values is expected to commence only from the beginning of 2027.


Level playing field between EU ETS and CBAM

In order to ensure a level playing field between installations located within the Union (subject to the EU ETS) and installations located outside the Union (subject to CBAM), the calculation of embedded emissions for CBAM goods takes into account the continued free allocation of emission allowances under the EU ETS.

To that end, the concept of a CBAM benchmark has been introduced, reflecting the free allocation benchmarks applicable to EU installations. This mechanism aligns the CBAM system with the EU ETS by ensuring that the carbon cost borne by importers corresponds to the effective carbon cost borne by EU producers after free allocation. The introduction of the free allocation embedded emission (CBAM benchmark) therefore prevents an imbalance whereby imported goods would be subject to a higher carbon cost than equivalent goods produced within the Union.  This mechanism safeguards competitive neutrality between operators subject to the EU ETS and those falling under the CBAM framework.

In addition, CBAM will take account any domestic charges applied to the manufacture of affected goods in third countries. 


What happens if you don't comply?

  • Fines and penalties;
  • Inability to import CBAM goods in the EU;
  • Negative impact on your corporate brand and ESG strategy;
  • Potential loss of customers who may source goods from your competitors.


Recommended actions for importers and/or indirect customs representatives:

  • Apply for the status of authorised CBAM declarant before 31 March 2026 (if you expect to exceed the 50 tonnes threshold in 2026) in order to avoid disruptions to import activities and potential administrative penalties;
  • Establish communication channels with third-country producers in order to obtain reliable data on the embedded emissions of CBAM goods (to be verified by an accredited verifier) in order to avoid the application of the high standard values;
  • Prepare internal data collection and compliance processes to ensure that the necessary emissions data, supporting documentation, and calculation methodologies can be provided in accordance with the CBAM Regulation and implementing acts;
  • Assess the potential financial impact of CBAM on your company’s operations, including the expected cost of CBAM certificates and possible implications for sourcing strategies and pricing;
  • Review contractual arrangements with suppliers to ensure that obligations regarding the provision of emissions data and cooperation in the CBAM verification process are clearly defined;
  • Prepare for the purchase and surrender of CBAM certificates as from 2027, including ensuring that at least 50% of the required CBAM certificates are held in the account at the end of each quarter;
  • Monitor regulatory developments and guidance issued by the European Commission, as additional implementing rules and technical requirements continue to be clarified during the upcoming months.


How BDO can assist

The CBAM framework introduces new compliance, reporting and financial obligations for importers of CBAM goods and, in certain cases, for indirect customs representatives. We support companies in navigating these requirements and ensuring compliance with the CBAM Regulation.
  • CBAM impact and readiness assessment
  • Registration and compliance support
  • Contractual and supply chain review
  • Ongoing regulatory monitoring