The CBAM guide you need starts here: 13 foundational articles covering Regulation (EU) 2023/956, 6 covered sectors, the UK parallel mechanism, and every compliance concept EU importers and non-EU exporters require in the definitive phase that began January 1, 2026. This hub organizes those articles into a structured learning path so that readers can move from core definitions through to sector-specific and country-specific obligations without gaps.
Caption: Regulation (EU) 2023/956 established CBAM as a certificate-based mechanism linked to the EU ETS carbon price, effective January 1, 2026.
What Is CBAM and Why Does It Exist?
CBAM (Carbon Border Adjustment Mechanism) is the EU regulatory system, established by Regulation (EU) 2023/956, that requires authorized EU importers of carbon-intensive goods to purchase certificates proportional to the embedded CO₂ emissions of their imports, priced at the EU ETS carbon price, to prevent carbon leakage. The mechanism is not a tariff, carbon tax, or border tax. It is a certificate-based adjustment that mirrors the cost EU producers already pay under the EU Emissions Trading System.
Carbon leakage occurs when EU manufacturers face higher carbon costs than foreign competitors, creating an incentive to relocate production outside the EU or for cheaper, higher-emission imports to displace EU-made goods. CBAM closes that gap. The legal basis is Article 192(1) TFEU, positioning CBAM as environmental policy rather than trade law.
The complete EU CBAM guide covers the mechanism from its 2023 origins through the current definitive phase, including how certificates are priced, what authorized declarant status means, and how the mechanism interacts with the EU ETS free allocation phase-out through 2034.
What Topics Does This Learning Section Cover?
This section covers 13 articles organized across 4 subject areas: the EU regulatory framework, sector scope, the UK parallel mechanism, and foundational compliance concepts. The table below lists every article in this hub with its purpose and primary audience.
| Article | URL | Primary Purpose | Audience |
|---|---|---|---|
| CBAM Root Guide | /learn/eu-cbam/ | End-to-end mechanism overview | All readers |
| What Is CBAM | /learn/what-is-cbam/ | Core definition, plain-language | New readers |
| Regulation (EU) 2023/956 | /learn/regulation/ | Legal text, articles, legal basis | Compliance teams |
| Omnibus Amendment | /learn/omnibus/ | Changes made by Reg. 2025/2083 | All readers |
| CBAM Timeline | /learn/timeline/ | Key dates from 2023 to 2034 | Planning teams |
| Covered Sectors | /learn/sectors/ | 6 sectors, CN codes, emission factors | Importers, exporters |
| Implementing Regulations | /learn/implementing-regulations/ | 13 secondary regulations | Legal, compliance |
| ETS Free Allocation | /learn/free-allocation/ | Phase-out schedule 2026–2034 | EU producers |
| UK CBAM Guide | /learn/uk-cbam/ | UK mechanism overview | UK-facing businesses |
| UK vs EU CBAM | /learn/uk-cbam/vs-eu-cbam/ | Side-by-side comparison | Cross-border traders |
| UK CBAM Sectors | /learn/uk-cbam/sectors/ | UK sector scope | UK importers |
| UK CBAM Compliance | /learn/uk-cbam/compliance/ | UK compliance steps | UK importers |
| UK-EU Double Payment | /learn/uk-cbam/double-payment/ | Overlapping liability risk | UK-EU traders |
The EU Regulatory Framework
Regulation (EU) 2023/956 of 10 May 2023 is the primary legal instrument. It entered into force on 17 May 2023 and its definitive phase started January 1, 2026. The CBAM regulation article covers all operative articles, from Article 2 on scope to Article 36 on entry into force, with the original text and the changes introduced by the Omnibus amendment.
The Omnibus amendment refers to Regulation (EU) 2025/2083 of 8 October 2025, which made 4 significant structural changes: it pushed the first CBAM declaration deadline from May 31 to September 30, 2027; it lowered the quarterly holding requirement from 80% to 50% of cumulative embedded emissions; it raised the de minimis threshold to 50 tonnes annual mass per importer (with electricity and hydrogen excluded from de minimis relief); and it set certificate sales to begin February 1, 2027 rather than January 2026.
The CBAM implementing regulations article covers all 13 secondary regulations, including Implementing Regulation (EU) 2023/1773 (transitional reporting), Implementing Regulation (EU) 2024/3215 (authorized declarant procedures), and Implementing Regulation (EU) 2025/2621 (default value mark-up schedule). These secondary instruments contain the operational detail that the primary regulation delegates.
For timeline context, the CBAM timeline article maps every key date from October 1, 2023 (transitional period start) through January 1, 2034 (full free allocation phase-out), including the March 31, 2026 authorization application deadline and the September 30 annual declaration cycle.
The Six Covered Sectors
CBAM covers 6 sectors under Annex I of Regulation (EU) 2023/956: iron and steel, cement, aluminium, fertilizers, electricity, and hydrogen. The 6 CBAM covered sectors article provides the full list of combined nomenclature (CN) codes for each sector, the applicable emission factors, and whether direct emissions, indirect emissions (from electricity in production), or both are priced for each sector.
Emission factors vary significantly across sectors and production routes. Blast furnace steel carries a factor of approximately 2.0 tCO₂ per tonne of product, while electric arc furnace scrap steel sits near 0.5 tCO₂ per tonne. At the EU ETS price of approximately €70/tCO₂ as of late March 2026, those translate to gross CBAM costs of roughly €140 per tonne and €35 per tonne respectively, before the free allocation adjustment reduces 2026 net liability to just 2.5% of the gross figure.
The ETS free allocation phase-out article explains how that 2.5% CBAM factor rises each year to reach 100% by January 1, 2034. The steepest increase occurs between 2029 (22.5% factor) and 2030 (48.5% factor), making that 12-month window the highest-impact planning period for businesses currently benefiting from free allocation.
Caption: CBAM prices embedded CO₂ emissions in 6 sectors, with cement and fertilizers also pricing indirect emissions from electricity use in production.
The UK CBAM
The United Kingdom introduced its own carbon border adjustment mechanism, which applies from January 1, 2027, covering a broadly similar but not identical set of sectors. The UK CBAM guide is the starting point for businesses trading into or out of the UK market. It covers the UK mechanism's legal basis, sector scope, and administrative structure.
The UK vs EU CBAM comparison article examines the 5 most material differences between the two mechanisms: sector scope variations, pricing methodology divergences, de minimis threshold differences, declaration calendar differences, and verification requirements. Understanding those differences is prerequisite for businesses operating on both sides of the UK-EU trade relationship.
Businesses trading CBAM goods in both directions face a specific UK-EU CBAM double-payment risk if they do not structure their supply chains and import flows to account for the concurrent operation of both mechanisms. UK CBAM compliance covers the specific obligations UK importers face, and UK CBAM covered sectors details which CN codes fall within the UK mechanism's scope.
Navigating This Section
The 4 articles that form the core learning path for new readers are listed below in recommended reading order.
- What is CBAM: plain-language definition and mechanism overview, with no assumed prior knowledge
- Regulation (EU) 2023/956: the legal text and its operative articles, for readers who need primary source grounding
- CBAM timeline: every key date in a single reference, for readers who need to understand where the mechanism stands now versus where it is heading
- 6 CBAM covered sectors: sector-by-sector scope with CN codes, for readers who need to determine whether their goods fall within CBAM's reach
Readers with active compliance obligations can also access CBAM compliance obligations and EU importer guidance for obligation-specific detail that goes beyond foundational knowledge into operational steps.
Frequently Asked Questions About CBAM
Is CBAM a tax or a tariff?
CBAM is neither a tax nor a tariff. It is a certificate-based mechanism that requires EU importers to purchase CBAM certificates priced at the EU ETS auction clearing price, with the number of certificates calculated from the embedded CO₂ emissions of imported goods. The EU Commission's legal basis is Article 192(1) TFEU (environmental policy), not trade law. Defining CBAM as a tariff or border tax is legally imprecise.
Does CBAM apply to all imported goods?
CBAM applies only to goods in the 6 sectors listed in Annex I of Regulation (EU) 2023/956: iron and steel, cement, aluminium, fertilizers, electricity, and hydrogen. A de minimis threshold of 50 tonnes annual mass per importer exempts small-volume importers, though electricity and hydrogen are excluded from that exemption. Goods outside the 6 covered sectors are not subject to CBAM obligations, regardless of their carbon intensity.
When did the CBAM definitive phase start?
The CBAM definitive phase started January 1, 2026. Before that, from October 1, 2023 through December 31, 2025, importers operated under a transitional period that required quarterly emissions reporting but did not require certificate purchases. The first CBAM declaration covering calendar year 2026 is due September 30, 2027.
Do UK importers face both UK CBAM and EU CBAM?
UK importers that export CBAM goods to the EU face EU CBAM obligations on those exports. UK importers bringing CBAM goods into the UK face UK CBAM obligations from January 1, 2027. A business importing steel from India into the UK and then re-exporting processed steel products to the EU could face obligations under both mechanisms. The UK-EU CBAM double-payment risk article explains how this overlapping liability arises and what structural options exist to manage it.