What is CBAM?

The EU prices industrial carbon through the Emissions Trading System (ETS): installations inside the EU must hold an allowance for every tonne of CO₂ they emit. That cost does not apply to goods produced outside the EU, which creates an incentive to move carbon-intensive production abroad and import the finished goods — carbon leakage.

The Carbon Border Adjustment Mechanism (CBAM) closes that gap. It puts a carbon price on imports of selected goods equal to the price those goods would have carried had they been produced under the EU ETS, so domestic and imported production compete on the same carbon cost.

The legal obligation sits with the EU importer — the party that brings CBAM goods into the customs territory of the Union. Non-EU producers are not regulated entities under CBAM, but in practice their EU customers require emissions data from them to file.

A mass-based de minimis threshold of 50 net tonnes of CBAM goods per importer per year sits below the obligation: importers under that volume are exempt from purchasing and surrendering certificates. Above it, the full obligation applies across the six covered sectors.

An importer above the threshold registers as an authorised CBAM declarant. Each year it declares the embedded emissions of the goods it imported and surrenders one CBAM certificate for each tonne of those emissions, after adjustment for the phase-in factor and any carbon price already paid at origin.

Certificates are bought from the Commission at a price linked to the weekly average EU ETS auction price. The declarant’s annual CBAM declaration — submitted as a structured XML file to the EU CBAM Registry — is the document that records the emissions and reconciles the certificates surrendered.

Carbon Mandate prepares and checks the emissions data and the XML for the producer and the importer. The EU importer files it with the Registry as declarant of record — preparer, not filer.