The EU Carbon Border Adjustment Mechanism (CBAM) has officially entered its definitive phase as of 1 January 2026. After two years of transitional reporting, the rules have evolved significantly with new simplifications, revised timelines, and stricter verification requirements. If you are an exporter to the EU and have not yet engaged a CBAM Consultant or invested in a robust CBAM Calculation and reporting system, the clock is ticking. This blog updates you on everything that has changed since the original framework was published and outlines the key actions your business must take today.
CBAM is now live and financially binding: What that means?
The transitional phase (October 2023 to December 2025) required importers to submit quarterly CBAM reports on embedded emissions, but imposed no financial penalties for non-compliance. That era is over. From 1 January 2026, every tonne of carbon embedded in CBAM-covered importson sectors such as steel, iron, cement, aluminium, fertilisers, electricity, and hydrogen, carries a direct financial cost. The CBAM Registry is now live and fully integrated with EU Customs systems, processing import declarations in real time.
Penalties under Article 16 of the CBAM Regulation remain at €100 per tonne of CO₂ equivalent for inaccurate or missing declarations, adjusted for inflation. A steel exporter under-reporting 1,000 tonnes of CO₂ faces a fine of €100,000 before certificate costs are even factored in.
Key changes since September 2024: The Omnibus simplification package
On 20 October 2025, Regulation (EU) 2025/2083: the Omnibus Regulation, entered into force, introducing substantial changes to ease administrative burdens, particularly for SMEs:
• New De Minimis Threshold: Importers bringing in 50 tonnes or less (cumulative net mass) of CBAM goods per year are fully exempt from all CBAM obligations, reporting, authorisation, and certificate purchase. The European Commission estimates this exempts around 90% of importers by number, while retaining coverage of 99% of embedded emissions.
• Certificate Purchase Deadline Shifted: No certificates will be purchased in 2026. The first certificate surrender deadline is now 30 September 2027 covering emissions from 2026 imports. Certificate prices for 2026 will reflect quarterly averages of EU ETS allowance prices.
• Annual Declaration Deadline: The annual CBAM declaration deadline has been moved from 31 May to 30 September of the following year, giving companies more time to compile verified data.
• Reduced Quarterly Certificate Holding Requirement: The requirement to hold certificates at the end of each quarter has been reduced from 80% to 50% of embedded emissions since the start of the calendar year.
• Simplified Default Values: Default emission values are now country- and product-specific, published as Excel files by the Commission. However, they come with phased-in mark-ups up to +30% from 2028 for most CBAM products making actual data collection far more cost-effective in the long run.
CBAM Calculation: actual data vs. default values
Accurate CBAM Calculation is now more critical than ever. Importers may use actual embedded emissions data collected from production facilities in third countries, or fall back on default values set by the Commission. The catch: default values include steep mark-ups (starting at +30% for most sectors from 2028) that inflate certificate costs significantly. For aluminium, steel, and iron, embedded emissions from precursors are counted by default, while emissions from finishing processes are no longer included aligned with EU ETS rules. Businesses investing in installation-level emission tracking will see materially lower CBAM liabilities over time compared to those relying on defaults.
Verification is now mandatory: The role of a CBAM verifier
From 2026 onwards, all reported emissions must be independently verified by an accredited third party, a CBAM Verifier. The implementing acts published on 17 December 2025 established detailed accreditation and verification rules. Verifiers must conduct on-site inspections during the first year of the definitive phase (2026), with limited flexibility for virtual visits thereafter based on a risk-based approach. Accreditation is open to entities both inside and outside the EU, provided they are accredited by recognised EU accreditation bodies. Non-compliant or unverified emissions data will be rejected, triggering penalties and potential import blocking. Engaging an authorised CBAM Verifier early is no longer optional, it is a legal prerequisite for continued EU market access.
The CBAM report: From quarterly to annual
One of the most operationally significant changes is the shift from quarterly to annual CBAM Report submissions. During the transitional phase, importers filed quarterly reports through the CBAM Transitional Registry. In the definitive phase, a single annual CBAM Report covering the full calendar year’s imports must be submitted, with the first due by 30 September 2027 for 2026 imports. This report must include verified embedded emissions, free allocation adjustments, and details of any carbon price paid in third countries. Exporters must ensure their production-level emission data is audit-ready throughout the year not scrambled together at deadline time.
CBAM Communication: Bridging the exporter-importer gap
Effective CBAM Communication between non-EU exporters and their EU importer counterparts is now a make-or-break compliance factor. EU importers are legally obligated to acquire authorised CBAM declarant status and purchase certificates based on verified data provided by exporters. If the exporter cannot supply accurate, timely, and verifiable emissions data, the EU importer faces penalties and supply chain disruption. This creates a direct contractual incentive: European buyers will increasingly demand CBAM Communication protocols structured data sharing, standardised emission disclosures, and digital audit trails, as a condition of continued business. The CBAM Registry also facilitates information exchange between declarants, verifiers, customs authorities, and national competent authorities, making transparency unavoidable.
Why do you need a CBAM Software + Consultant solution now?
Navigating the Omnibus amendments, implementing acts, verification requirements, and free allocation adjustment formulas is genuinely complex and no single tool or person can do it alone. That’s why The Sustainability Cloud offers a dual approach: purpose-built CBAM software paired with expert CBAM Consultant support so you get both the technology and the expertise in one place.
The Software Side: Our platform automates CBAM Calculation at the installation level, integrating plant-level data across every process in your production route. It generates audit-ready CBAM Reports, tracks carbon taxes paid in third countries, manages CBAM Communication with EU importers through structured digital data flows, and supports third-party CBAM Verifier access directly within the platform. Whether you are exporting steel, aluminium, cement, or fertilisers, TSC CBAM handles the full reporting lifecycle from raw emission inputs to the final annual declaration.
The Consultant Side: Our CBAM Consultant team works alongside the software to map your production-level emission sources, align data collection with EU-approved methodologies, forecast certificate costs, and assess whether your volumes fall below the 50-tonne de minimis threshold — potentially saving smaller exporters significant compliance costs. With CBAM scope expanding from 2028 to cover downstream products, a CBAM Consultant embedded in your compliance strategy now means you won’t be scrambling later.
Together, the TSC software + CBAM Consultant model gives you a complete, end-to-end solution not just a tool that generates numbers, but a team that ensures those numbers are accurate, verified, and defensible to EU authorities. Talk to The Sustainability Cloud today to get started.
What Businesses Must Do Right Now
• Apply for Authorised CBAM Declarant status in the CBAM Registry if importing above the 50-tonne threshold
• Engage an accredited CBAM Verifier for mandatory on-site verification in 2026
• Implement installation-level emission tracking to avoid costly default value mark-ups
• Establish CBAM Communication channels with EU importers, ensuring structured, auditable data flows
• Begin 2026 CBAM Calculation and budget for certificate purchases due by 30 September 2027
• Work with a CBAM Consultant to review your full exposure across the supply chain
The CBAM landscape has shifted materially since September 2024 — simpler in some respects, more financially urgent in others. 2026 imports are already creating certificate liabilities. The first CBAM Report for the definitive phase is due in less than 20 months. Businesses that act now on CBAM Calculation, CBAM Verifier engagement, and CBAM Communication with EU partners will be best placed to manage costs and protect market access. Those that delay will face compounding penalties, disrupted trade, and the loss of European customers who can no longer afford to wait.
