Question 1

What is the Carbon Border Adjustment Mechanism (CBAM)?

Accepted Answer

CBAM is the EU's carbon border tax on imports of carbon-intensive goods — cement, steel, aluminium, fertilisers, hydrogen, and electricity. From January 2026, EU importers must purchase CBAM certificates matching the embedded carbon emissions of their imports. The certificate price equals the EU ETS carbon allowance price.

Question 2

How do you calculate CBAM certificate cost?

Accepted Answer

CBAM cost = Import quantity (tonnes) × Embedded emissions factor (tCO₂/tonne) × EU ETS price (€/tCO₂). If the origin country has a carbon price, you deduct that from the EU ETS price before multiplying. For example: 100 tonnes of steel × 1.85 tCO₂/t × €65/tCO₂ = €12,025.

Question 3

Which products are covered by CBAM?

Accepted Answer

CBAM currently covers five sectors: cement (CN chapters 25, 68, 69), iron and steel (CN chapters 72–73), aluminium (CN chapter 76), fertilisers (CN chapters 28, 31), and hydrogen (CN 2804.10). The European Commission plans to expand CBAM to additional sectors after 2030.

Question 4

Which countries are exempt from CBAM?

Accepted Answer

Countries with an ETS fully linked to the EU ETS are exempt from CBAM. Currently, Iceland, Liechtenstein, Norway, and Switzerland are exempt. Other countries are subject to CBAM regardless of whether they have any domestic carbon pricing.

Question 5

What is required for a CBAM quarterly report?

Accepted Answer

During the CBAM transitional phase (2023–2025), importers must file quarterly reports via the EU CBAM Transitional Registry covering: declarant EORI and contact details, 8-digit CN code and goods description, country of origin and export, net quantity in tonnes, production installation details (name, address), direct and indirect embedded emissions per tonne, and any carbon price already paid in the origin country.

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