EU Regulation 2023/956. A carbon price applied to certain goods imported into the EU, matched to the price EU-based producers already pay under the EU Emissions Trading System — intended to prevent "carbon leakage," where production simply shifts to countries with weaker climate rules.
The current, live phase of CBAM, in effect since 1 January 2026 — annual declarations, verified emissions reports, and CBAM certificate purchase and surrender. Replaces the earlier transitional phase, which only required quarterly reporting with no financial obligation.
The EU-based importer (or their customs representative) who registers with their National Competent Authority, declares the embedded emissions in what they import, and surrenders CBAM certificates. The obligation legally sits with the declarant — not the exporter — which is exactly why exporters who can hand their EU buyer clean, verified data have a real commercial edge.
What a declarant purchases and surrenders to cover the embedded emissions in their imports, priced against the EU ETS's own weekly auction average. Bought through the declarant's National Competent Authority via the EU's CBAM Registry.
The share of embedded emissions that actually requires a certificate, after accounting for the EU's own free-allocation phase-out under its domestic ETS. Starts at 97.5% in 2026, declining gradually toward 0% by 2034 as EU producers' own free allowances phase out on the same schedule.
The greenhouse gas emissions released in producing a good — direct (from the production process itself) and indirect (from the electricity consumed making it). CBAM's entire reporting structure exists to establish this one number, per product, per installation.
Embedded emissions expressed per tonne of product (tCO₂e/t) — direct and indirect calculated separately, then combined into a total. The figure that ultimately determines how many certificates a shipment requires.
EU-published fallback emissions figures, used when an exporter can't supply their own measured data — for complex goods, capped at covering up to 20% of total embedded emissions. Calibrated conservatively across an entire industry, so they typically sit above what a reasonably efficient real installation actually produces.
The three-part discipline CBAM requires: monitoring your activity data on an ongoing basis, reporting it in the prescribed format, and having it independently verified. Widely cited by Indian industry as the actual burden of CBAM — more than the carbon price itself.
The documented methodology behind an installation's reporting — who's responsible for which data, where it comes from, how often it's collected, and what happens when a source is unavailable. Expected under the EU's own guidance (§6.4) and one of the first things a verifier will ask to see.
The body in each EU member state responsible for administering CBAM locally — declarant registration, certificate sales, and enforcement.
The formatted operator-to-importer handoff document — the actual thing an exporter's installation produces at the end of a reporting period, and the document a declarant needs to file their own annual declaration.
Independent third-party review of a reported emissions figure, following ISO 14064-3's structured process: risk assessment, materiality-based sampling, findings evaluation, internal review, and a formal opinion. Not the same as self-declaration, and increasingly what EU buyers actually expect to see.
The CBAM classification a specific product falls under (e.g. a particular steel or fertiliser category) — determines which default values and reporting requirements apply, and is usually the very first thing to confirm before doing anything else.
A CBAM-covered input material used to make another CBAM-covered good — e.g. purchased urea used in fertiliser blending. A precursor's own embedded emissions carry forward into the final product's total, which is exactly why a supplier's inability to provide data becomes your problem, not just theirs.
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