Guide 06

CBAM glossary

Twenty core CBAM terms, defined with regulatory context.

Group 01

Core concepts

CBAMRegulation (EU) 2023/956: The EU Carbon Border Adjustment Mechanism, which prices the carbon embedded in selected imports to match the EU ETS carbon cost of domestic production. It prevents carbon leakage by removing the incentive to produce carbon-intensive goods outside the EU.
EU ETS: The EU Emissions Trading System, the cap-and-trade market that sets the carbon price for installations inside the EU. CBAM certificate prices are linked to its weekly average auction price.
CBAM certificate: A unit an authorised CBAM declarant surrenders to cover one tonne of declared embedded CO₂e. Certificates are bought from the Commission at a price tracking the EU ETS.
Threshold: The 50-tonne mass-based de minimis volume of CBAM goods per importer per year, below which the obligation does not apply. It replaced the earlier €150 per-consignment exemption under the 2025 simplification.
Phase-in period: The 2026–2034 ramp during which the share of embedded emissions requiring certificates rises from a small fraction to 100%. It mirrors the withdrawal of free allocation under the EU ETS.

Group 02

Embedded emissions: The greenhouse gases released in producing a good, expressed per tonne of product. They are reported as direct and, where required, indirect.
Direct emissions: Emissions from the production process itself and the heat consumed on site. They count towards the certificate obligation in every covered sector.
Indirect emissions: Emissions from the electricity used in production, wherever it was generated. They are in scope for reporting in some sectors but not all.
Default valueIR (EU) 2025/2621 — Annex I: A conservative emissions figure published by the Commission for a good and country of origin, used when actual data is unavailable. It is set high enough to avoid understating emissions.
Actual value: An emissions figure derived from the producer’s own monitored data rather than a published default. It is usually lower than the default where it can be substantiated and verified.

Group 03

Authorised CBAM declarantRegulation (EU) 2023/956 — Art 5: The EU importer authorised to submit CBAM declarations and surrender certificates. It is the only party that files with the Registry.
Declarant: The party legally responsible for the declaration of imported goods. Under CBAM this is the authorised CBAM declarant.
Importer: The party bringing CBAM goods into the EU customs territory. It is the entity that carries the CBAM obligation.
Exporter: The non-EU producer or seller of CBAM goods. It is not a regulated entity under CBAM, but it is the source of the emissions data the importer needs.
Verification: Independent checking of reported actual emissions against the methodology by an accredited verifier. It is required for actual values used in a declaration.
Accreditation: The formal recognition that a verifier is competent to verify CBAM emissions data. Only accredited verifiers’ verification is accepted by the Registry.

Group 04

CN code: The eight-digit Combined Nomenclature classification that determines whether a good is in CBAM scope and which sector rules apply. Scope is set by code, not by description.
Surrender: The annual act of handing back enough certificates to cover declared embedded emissions. It is due 30 September of the year following import — first surrender 30 September 2027.
XML declaration: The structured file, conforming to the Commission’s schema, that records embedded emissions and reconciles certificates in the CBAM Registry. Its format is validated on submission.
Iron and steel: The CBAM sector with the most involved data requirements, covering CN chapters 25, 72, and 73 and bringing precursors into scope. Precursor emissions carry into the finished product.