On Jan. 1, 2026, the Carbon Border Adjustment Mechanism (CBAM) will finally come into force. This European regulation introduces a carbon tax on imports of certain carbon-intensive products. For many organizations, this means a change in how they set up and report their supply chain. What exactly does CBAM mean and what should you as an organization pay attention to?
What is CBAM and why does it exist?
The Carbon Border Adjustment Mechanism is a European Union instrument that ensures that importers of certain goods pay a fair price for CO₂ emissions released during production. Specifically, when an organization imports CO₂-intensive products from countries outside the EU, compensation must be paid through CBAM certificates starting in 2026.
The thinking behind CBAM is clear: companies within the EU already pay for their carbon emissions through the European Emissions Trading Scheme(EU ETS). This could give importers of goods from countries with less stringent climate legislation an unfair competitive advantage. CBAM eliminates this advantage by putting an equal price on CO₂ emissions, regardless of where the product was produced. In doing so, the mechanism also prevents CO₂ leakage: moving production to countries where companies do not have to pay for their greenhouse gas emissions.
CBAM is part of a broader European ambition to become climate neutral and is part of the Fit for 55 package. Like the CSRD and CSDD, this EU regulation requires organizations to be transparent about their climate impact and take responsibility for emissions throughout the value chain.
What products are covered by CBAM?
Currently, CBAM focuses on six product categories that account for a significant portion of industrial CO₂ emissions:
- Cement
- Iron and steel
- Aluminum
- Fertilizer
- Electricity
- Hydrogen
It also covers certain pre-products and a limited number of downstream products. The European Commission is examining whether to further expand the scope beyond 2026 to other sectors, such as chemicals and polymers.
From transition phase to final regime
As of October 2023, a transition period ran during which importers of CBAM goods had to report on CO₂ emissions from the production of these goods. Through the CBAM transitional registry (CBAM registry), importers were required to report quarterly which goods with which CN codes they had imported and what the embedded emissions were. This period expires at the end of December 2025. From Jan. 1, 2026, the final obligations, including financial aspects, will apply.
From 2026: what are the obligations?
As of Jan. 1, 2026, CBAM changes from a reporting obligation to a financial obligation. Specifically, this means:
- Admission as CBAM declarant: Only admitted CBAM declarants may import (more than 50 tons per year of) CBAM goods. Importers must apply for this status with the Netherlands Emissions Authority (NEa). The application process can take up to 200 days. Those wishing to import by 2026 must have this authorization arranged. The customs declaration must include the CBAM account number.
- Purchase of CBAM certificates: Importers must purchase annual CBAM certificates corresponding to the CO₂ emissions of their imported goods. The price of these certificates is linked to the price of emission allowances in the emissions trading system (EU ETS), currently between €80 and €100 per ton of CO₂. Incidentally, the deadline to actually buy certificates has been pushed back to February 2027.
- Annual declaration: Importers submit an annual verified declaration showing both direct and indirect emissions from imported products. Sufficient certificates to cover emissions must be turned in by May 31 of each year.
Simplification for smaller importers
Good news for smaller importers: organizations that import less than 50 tons of CBAM goods per year are exempt from CBAM obligations. This threshold was introduced in October 2025 as part of the so-called Omnibus simplification. This is expected to exempt some 182,000 importers, mostly SMEs and individuals, while still covering more than 99 percent of relevant emissions.
The impact on Dutch organizations
For many Dutch companies, CBAM has significant implications. Not only for direct importers, but also for downstream companies that depend on raw materials such as steel, aluminum or cement. According to estimates by the European Commission, European importers will incur annual CBAM costs in excess of €2 billion by 2030.
The impact on the value chain can also be significant. Organizations must work more closely with their suppliers to obtain reliable emissions data. Suppliers that cannot provide detailed data are assessed based on default values that often exceed actual emissions. This makes products from those suppliers more expensive and can lead to rethinking the supply chain.
How do you prepare your organization?
A good approach to CBAM requires more than just arranging certificates and reports. It requires a strategic approach with sustainability and
1. Analyze the impact on your supply chain.
Map which products are covered by CBAM and how much CO₂ emissions are associated with them. This provides insight into the financial impact and helps to set priorities. Moreover, for organizations that are subject to CSRD, this analysis fits well with the mandatory reporting of scope 3 emissions.
2. Collaborate with suppliers
Ask suppliers to provide reliable emissions data. The more accurate this data is, the lower the cost of CBAM certification. Suppliers who cannot provide detailed data are assessed based on default values that often exceed actual emissions. It can be valuable to support suppliers in measuring and reducing their emissions. Over time, this leads to lower CBAM costs and a more sustainable supply chain.
3. Arrange CBAM admissions.
Make sure you have applied for authorized CBAM declarant status from the NEa. Without this authorization, you will no longer be able to import CBAM goods as of 2026, which will affect your operations.
4. Build knowledge and capacity
CBAM requires new knowledge and skills within the organization. Make sure the right people are trained in emissions data collection and reporting. It may also make sense to establish an internal working group focused on ESG implementation and CBAM.
5. Make CBAM part of your sustainability strategy
See CBAM not just as a compliance obligation, but as an opportunity to strengthen your ESG strategy. By focusing on reducing emissions in the supply chain, you not only reduce CBAM costs but also contribute to your organization’s climate goals.
The fines for non-compliance
Organizations that fail to comply with CBAM obligations risk significant fines. Failure to report or pay on time can result in a fine of 10 to 50 euros per ton of CO₂ not properly reported or offset. For large importers, these fines can quickly reach hundreds of thousands of euros per year. Also, as of 2026, organizations that do not obtain timely approval as CBAM declarants will no longer be able to import CBAM goods at the European external border, which could lead to disruptions in business operations. Compliance with CBAM regulations is therefore essential.
Opportunities for sustainability
For organizations concerned with ESG and sustainability, CBAM offers opportunities. By investing in reducing emissions in the supply chain, they can not only save costs but also strengthen their competitive position.
Time to act
The transition period is coming to an end and from January 2026 the obligations will become enforceable. Mapping the impact, having authorization, building knowledge and working with suppliers are steps organizations must take to comply with the new regulations.
Do you have questions about how CBAM impacts your organization or want help preparing? Feel free to get in touch. Together, we will ensure that CBAM remains not just a compliance exercise, but becomes a step toward a more sustainable business.