What Is CBAM? Complete Guide to EU Carbon Border Adjustment Mechanism
Learn the basics of CBAM, covered products, CN code classification, emissions data and preparation steps for EU trade.
What is CBAM?
CBAM (Carbon Border Adjustment Mechanism) is the European Union mechanism for addressing carbon emissions associated with certain imported goods. It connects product imports with information about embedded emissions and carbon-related requirements.
Why did the EU introduce CBAM?
CBAM was introduced to address carbon leakage risks and encourage greater transparency about emissions in international supply chains.
Which products are covered by CBAM?
CBAM currently covers selected carbon-intensive sectors including iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. The exact scope depends on product classification and CN codes.
Why are CN codes important?
CN codes are used to classify products entering the EU market. Correct classification is an important first step when checking whether a product may fall within CBAM scope.
How does CBAM affect importers and exporters?
Importers may need product information and emissions data, while suppliers outside the EU may need to provide manufacturing and carbon information to support customers.
How is CBAM exposure estimated?
A simplified approach considers embedded emissions, imported quantities and applicable carbon prices. Companies should use relevant regulatory methods and available data.
How can companies prepare?
Preparation steps include checking CN codes, collecting supplier information, improving emissions data management and understanding CBAM reporting requirements.