The Carbon Border Adjustment Mechanism (CBAM) is an EU policy designed to prevent carbon leakage by imposing a carbon price on imports of certain goods from countries with less stringent climate regulations. The CBAM implementation timeline begins with a transitional phase starting in October 2023, during which importers must report the embedded emissions of covered products but are not yet required to pay financial adjustments. This phase allows companies and authorities to prepare for full enforcement. From January 1, 2026, CBAM will be fully operational. Importers will need to purchase CBAM certificates corresponding to the carbon emissions embedded in their imported goods, effectively equalizing the carbon costs between domestic products and imports. The mechanism initially covers sectors like cement, iron and steel, aluminum, fertilizers, and electricity generation. The timeline includes ongoing monitoring and possible expansion of covered sectors. The EU will engage with international partners to ensure compatibility with World Trade Organization rules. Overall, the phased implementation aims to provide transparency, encourage cleaner production globally, and support the EU’s climate goals by 2030.

Published on: 2026-01-18 at 00:15:02