Image courtesy: WAM/ For illustrative purposes
The European Union’s (EU) carbon border tax will enter its definitive phase on Wednesday, January 1, 2026, the European Commission said, marking the start of full implementation of the bloc’s Carbon Border Adjustment Mechanism (CBAM).
Under the mechanism, EU importers of selected carbon-intensive goods will be required to declare the embedded greenhouse gas emissions in their imports and surrender CBAM certificates corresponding to those emissions, according to the commission.
Applications must be submitted before import and at the latest by March 31 for all concerned import companies.
The carbon border tax applies to imports of certain categories
The system applies to imports of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, sectors identified by the EU as having a high risk of carbon leakage.
CBAM is designed to ensure that imported goods face a carbon cost equivalent to that borne by EU producers under the bloc’s Emissions Trading System, the commission said, supporting the EU’s climate objectives and preventing production from shifting to countries with less stringent emissions policies.
The definitive phase follows a transitional period during which importers were required only to report emissions without purchasing certificates.
From January, financial obligations under the mechanism will apply.
The commission said CBAM is a key element of the EU’s climate policy framework and will be progressively integrated alongside reforms to the emissions trading system.