Key takeaways
- CBAM is the EU's "carbon border charge" (Regulation 2023/956): it levels the CO₂ cost between EU producers paying the ETS and imports from countries without an equivalent carbon price.
- Covered goods: iron and steel, aluminium, cement, fertilisers, hydrogen, electricity. Scrap — ferrous (CN 7204) and aluminium (CN 7602) — is excluded.
- Importers of no more than 50 tonnes of CBAM goods per year are fully exempt (a threshold introduced by the Omnibus package; it does not apply to hydrogen and electricity).
- Nothing has to be bought during 2026: certificates go on sale on 1 February 2027, and the first annual declaration (covering 2026) is due by 30 September 2027.
- The full cost arrives gradually: in 2026 the mechanism bites on only about 2.5% of benchmark emissions, rising every year to 100% in 2034.
What CBAM is and who it affects
CBAM (Carbon Border Adjustment Mechanism) is how the European Union applies to imported goods a CO₂ cost equivalent to what European producers pay under the ETS. Its stated purpose is to prevent "carbon leakage" — production migrating to countries with weaker climate rules.
It affects anyone importing goods from the six covered sectors into the EU: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. For the metals supply chain that means semi-finished and many finished steel and aluminium products — billets, flat and long products, profiles, tubes, wire, structures — identified by the CN codes in Annex I of the regulation.
Two exclusions matter greatly to metals people. Scrap is out of scope: both ferrous scrap (CN 7204) and aluminium scrap (CN 7602) can be imported with no CBAM obligations. And the other non-ferrous metals — copper, zinc, nickel, tin, lead — are not covered today, though the scope is set to widen over time.
How it works: declarants, certificates, the ETS price
Since 1 January 2026, CBAM goods may only be imported by an "authorised CBAM declarant" (the status is requested from national authorities; importers who applied by 31 March 2026 could keep importing while their application was decided).
The declarant buys CBAM certificates — one per tonne of CO₂ embedded in the imported goods. The certificate price tracks ETS auctions: for 2026 imports it is the quarterly average of the quarter of importation; from 2027 it becomes a weekly average. Emissions are calculated from actual values reported by the producer or from default values published by the Commission; a carbon price already paid in the country of origin can be deducted.
The cost, however, phases in alongside the withdrawal of free ETS allowances for European industry: in 2026 CBAM applies to only about 2.5% of benchmark emissions, and the share rises every year to 100% in 2034. Looking only at the full ETS price overstates the 2026-2028 cost; ignoring it understates where prices will be in five years.
The 50-tonne threshold: who is exempt
The "Omnibus" simplification (published in the EU Official Journal on 17 October 2025) replaced the old €150-per-consignment allowance with a mass threshold: importers bringing in no more than 50 tonnes per year of CBAM goods in total (cement, fertilisers, iron and steel, aluminium combined) are exempt from authorisation, declaration and certificates. The threshold does not apply to hydrogen and electricity.
According to the Commission the exemption covers about 90% of importers while keeping about 99% of emissions in scope: small players out, almost all the tonnage in. Mind the cumulation: the threshold is annual and per importer, not per shipment — anyone hovering around 50 t must track the running total, because crossing it triggers the obligations.
The dates that matter
After the Omnibus changes, the calendar looks like this:
What changes for buyers: prices and contracts
For a buyer, CBAM is first of all a new cost line on non-EU imports, set to grow year after year as free allowances are phased out. "CBAM surcharges" are already appearing in negotiations: supplements that non-EU suppliers apply — or that importers ask to see itemised — to cover certificates and compliance.
The practical consequences: the price differential between EU and non-EU material must be read net of the CBAM cost expected at delivery date; supplier origin and carbon intensity become economic parameters, not just reputational ones; long-term contracts should spell out who bears the certificate cost and how it adjusts as the ETS price moves.
Certificate prices track ETS auctions, so that is the variable to watch — alongside the metal prices you already follow on FT Mercati.
Towards 2028: the downstream extension
On 17 December 2025 the Commission proposed (COM(2025) 989) extending CBAM to some 180 categories of steel- and aluminium-intensive downstream products — car parts, household appliances, cables, machinery, construction products — with application targeted at 1 January 2028, together with anti-circumvention measures. The Council is pushing for an even broader list.
The proposal is still in the legislative procedure (August 2026): the final list may change. But the direction is clear, and anyone importing semi-finished goods or components currently "outside CBAM" should check now whether their CN codes appear in the proposal, rather than discover the obligation on the eve of 2028.
Frequently asked questions
Does CBAM apply to scrap?
No. Ferrous scrap (CN 7204) and aluminium scrap (CN 7602) are excluded from the CBAM scope: they can be imported without authorisation, declaration or certificates. The exclusion covers scrap as such: a semi-finished product made from scrap falls under the ordinary rules, with the actual emissions of the process.
Is copper covered by CBAM?
No, not today: copper, zinc, nickel, tin and lead are not among the covered goods. The regulation does provide for periodic scope reviews, and the extension proposed for 2028 shows the trend is to widen: anyone trading these metals should keep an eye on future revisions.
How much does a CBAM certificate cost?
The price tracks the EU ETS auctions, in euros per tonne of CO₂: for 2026 imports it is the quarterly average of the quarter of importation, from 2027 a weekly average. Moreover, in 2026 the mechanism applies to only about 2.5% of benchmark emissions: the effective cost per imported tonne is still a fraction of the full ETS price.
I import more than 50 t a year: what must I do in 2026?
You need authorised CBAM declarant status and a record of what you import: quantities, quarter of importation, embedded emissions (supplier data or default values). Certificates can be bought from 1 February 2027, and the declaration for 2026 is due by 30 September 2027.
Below 50 tonnes a year, am I really exempt?
Yes: up to 50 cumulative tonnes per year of CBAM goods (cement, fertilisers, iron and steel, aluminium) there are no obligations at all — no authorisation, no declaration, no certificates. The threshold does not apply to hydrogen and electricity, and it must be tracked cumulatively: crossing it during the year triggers the obligations.
How do I build a purchasing strategy around CBAM?
By comparing EU and non-EU prices net of the expected CBAM cost, asking suppliers for emissions data, and settling in contracts who pays for certificates. We cover these practical tools in the free FT Mercati webinar on 23 September 2026.
Sources
Regulatory and institutional references for this guide:
- European Commission — CBAM definitive regime
- Regulation (EU) 2023/956 (consolidated text, EUR-Lex)
- Downstream extension proposal, COM(2025) 989
This guide is market information, not customs, tax or legal advice: for your company's compliance, consult your customs broker or advisor.