Carbon Border Adjustment Mechanism (CBAM)
What the EU’s Carbon Border Adjustment Mechanism Means for Global Freight Forwarding
The Carbon Border Adjustment Mechanism (CBAM) is a landmark regulation introduced under the European Green Deal to combat climate change and promote fair competition. As global freight forwarding continues to evolve, CBAM will significantly impact how goods are imported into the EU—especially for industries with high carbon footprints. For logistics managers and importers, understanding CBAM is essential to ensure compliance, manage costs, and support sustainable supply chains.
What is CBAM and Why Does it Matter?
CBAM is designed to prevent carbon leakage, which occurs when companies relocate production to countries with weaker climate policies or when carbon-intensive imports replace cleaner EU products. By aligning the carbon cost of imported goods with those produced in the EU, CBAM ensures a level playing field and encourages global decarbonization.
How CBAM Works?
During the transition phase (Oct 2023–Dec 2025), importers must report the greenhouse gas emissions embedded in their goods—both direct and indirect—without purchasing carbon certificates. From Jan 2026, only authorized CBAM declarants can import in-scope goods, and they must:
- Submit annual CBAM declarations
- Purchase carbon certificates reflecting the EU carbon price
- Deduct any carbon price already paid in the country of origin
This system incentivizes cleaner production globally and supports the EU’s climate neutrality goals.
Products Affected by CBAM
CBAM initially applies to six high-emission sectors with a high likelihood of carbon leakage:
- Iron and Steel
- Cement
- Aluminium
- Fertilisers
- Electricity
- Hydrogen
The list may be extended by the European Authority with further industries or commodities.
Goods below €150 or from countries under the EU Emissions Trading System (Norway, Switzerland, Iceland and Liechtenstein) are excluded. Additionally, no reporting is due if annual import of all affected commodities does not exceed 50 tones.
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What Importers Must do During the Transition (Until 31 December 2025)
- Total quantity of each in‑scope good (MWh for electricity; tons for other goods) by producing installation.
- Actual total embedded emissions (tCO₂e per MWh or per ton).
- Total indirect emissions (from electricity used in production), calculated per the CBAM implementing act.
- Carbon price paid in the country of origin (net of any rebates/compensation).
- From January 1, 2025, EU Member States grant “registered CBAM declarant” status. Importers must apply for this status to submit CBAM reports. Only authorized declarants can file reports with authorities. Also from January 1, 2026 the CBAM registration number must be entered into the import customs declaration.
To enable a smooth roll‑out, no purchase of CBAM certificates* is required during the transition.
*It is expected that the European Parliament defers the start of procuring certificates to a later point in time.
CBAM Timeline & Key Deadlines
- 1 Oct 2023 — Transition period starts (importers begin quarterly reporting; no certificates purchase).
- 31 Jan 2024 — First CBAM report due (covering Q4 2023).1
- Jan 2026 — End of transition and go‑live of final phase.
- 31 Jan 2026 — Last quarterly report due (Q4 2025).
- From 1 Jan 2025 — Importers can apply for authorized CBAM declarant status.
CBAM in 2026 and Beyond
From 1 Jan 2026, Only authorized CBAM declarants can import in‑scope goods into the EU. Importers must submit an annual CBAM declaration by end of May each year for the previous year and finance CBAM certificates that mirror the EU carbon price for the embedded emissions. If a non‑EU producer proves a carbon price was already paid in the country of production, that amount can be deducted from the certificates due.
The system is designed to discourage carbon leakage and encourage cleaner production globally.
Impact for Your Business – What shall you do?
CBAM declarations require detailed knowledge of overseas production processes and emissions. – data a customs broker cannot validate independently. Take time to understand the key rules and how they might affect your business. The EU offers helpful guidance and training materials.
CBAM Compliance Guide for practical guidelines
Download the CBAM Compliance Guide for practical guidelines – including comprehensive list of affected products with their HS codes, checklist and timelines to help your business prepare for the transition and final implementation phases.
How DHL Can Support
While DHL cannot validate emissions data, we can:
- Provide import declaration data
- Help identify CBAM-affected products
- Offer guidance on regulatory updates
Frequently Asked Questions
Climate change is a global problem that needs global solutions. As the EU raises its own climate ambition, and if less stringent climate policies prevail in many non-EU countries, there is a risk of so-called ‘carbon leakage'. Carbon leakage occurs when companies based in the EU, move carbon-intensive production abroad to countries where less stringent climate policies are in place than in the EU, or when EU products get replaced by more carbon-intensive imports.
Imported goods from all non-EU* countries and territories into EU27** countries will be covered by the CBAM.
* CBAM will not apply to goods originating in the following countries & territories: Iceland, Liechtenstein, Norway, and Switzerland, Büsingen, Heligoland, Livigno, Ceuta, Melilla.
** EU27 countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
CBAM will initially apply to imports of certain goods, with a value of CBAM goods above 150 EUR whose production is carbon intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. Download the CBAM Compliance Guide for the full list of products and HS codes.
The gradual implementation of CBAM over time will allow for a careful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities. During this period, importers of goods in scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without making any financial payments or adjustments.
Please see below the different phases of the CBAM regulation:
Date |
CBAM deadlines |
1 October 2023 |
Start of transition period |
31 January 2024 |
Deadline to submit first CBAM Report (for Q4 2023) |
1 January 2026 |
End of transition period, Go-Live of CBAM final phase |
31 January 2026 |
Deadline to submit last CBAM Report for Q4 2025 |
As of 1st of January 2026 the CBAM system will work as follows:
- The Importer will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules.
- Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods in a third country, the corresponding cost can be fully deducted from the carbon certificates upon import for the Importer.
- The CBAM will therefore help reduce the risk of carbon leakage by encouraging producers in non-EU countries to change their production processes into more sustainable processes
The quarterly CBAM Report should contain the following data:
- Total quantity of all types of goods, expressed in megawatt-hours for electricity and in tons for other goods, specified for each installation producing the goods in the country of origin
- The actual total embedded emissions, expressed in tons of CO2e emissions per megawatt-hour of electricity or for other goods in tons of CO2e emissions per ton of each type of goods
- The total indirect emissions calculated in accordance with CBAM implementing act
- The carbon price due in a country of origin for the embedded emissions in the imported goods, taking into account any rebate or other form of compensation available
CBAM declarations require knowledge of the overseas production processes and related carbon emissions. As a customs broker, DHL is not in a position to know these details or to assess the accuracy or completeness of information that may be provided.
We can assist you with providing information from the import declarations, managed by us and help you identify which products are affected.
The Importer will need to have the status of authorized CBAM declarant, to enable them to import CBAM goods. The Importer will need to file the annual CBAM declaration.The Importer will have the obligation to finance carbon certificates.
- European commission CBAM website: Carbon Border Adjustment Mechanism - Taxation and Customs Union
- European Commission's factsheet and Q&A document on CBAM: European Commission's Factsheet
- The World Bank’s CBAM Exposure Index can be found here: CBAM Exposure Index
