Quick answer
The EU Carbon Border Adjustment Mechanism (CBAM) is a carbon import charge that requires EU importers of cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen to pay for the embedded greenhouse-gas emissions of the goods they bring into the EU. The definitive period started on 1 January 2026, with the first CBAM certificates surrenderable in May 2027. Dutifi's CBAM tool will calculate embedded emissions, generate quarterly reports, and prepare the annual CBAM declaration.
What is CBAM?
The Carbon Border Adjustment Mechanism is an EU climate policy instrument introduced by Regulation (EU) 2023/956. Its purpose is to put the same carbon price on imports of certain goods as is paid by EU producers under the Emissions Trading System (EU ETS). By doing so, CBAM addresses "carbon leakage" — the risk that EU producers relocate to jurisdictions with weaker climate policies to avoid the cost of EU carbon pricing.
CBAM applies to six initial sectors selected for their carbon-intensity and trade exposure: cement, iron and steel (including some downstream products), aluminium, fertilisers, electricity, and hydrogen. The Commission has signalled the scope will expand to additional sectors — chemicals, polymers, and downstream steel and aluminium goods — over the coming decade.
During the transitional period (1 October 2023 to 31 December 2025), importers were required only to report embedded emissions, not to pay any charge. The definitive period began on 1 January 2026: importers must now hold a CBAM authorisation, surrender CBAM certificates corresponding to embedded emissions, and submit a verified annual CBAM declaration.
Why CBAM matters now
The definitive period has changed CBAM from an administrative reporting obligation to a real financial and operational cost. The CBAM certificate price is linked to the EU ETS auction price — currently around €70 per tonne of CO2-equivalent — and importers must surrender certificates for the full embedded emissions of every covered import.
For a typical steel import of 1,000 tonnes with embedded emissions of 1.9 tonnes CO2 per tonne of product, the CBAM cost runs into low six figures per shipment at current carbon prices. Importers who source from low-carbon producers (or who can document a carbon price already paid in the country of origin) can reduce their CBAM bill significantly — but only if they can produce the verified emissions data and origin-country carbon pricing evidence required by the regulation.
Non-compliance penalties are material. Failure to surrender enough CBAM certificates triggers a penalty of three times the certificate price per tonne of under-surrendered emissions. Failure to register as an authorised CBAM declarant before importing covered goods can result in suspension of import rights.
Who needs this tool
CBAM compliance touches several distinct roles:
- EU importers of cement, steel, aluminium, fertilisers, electricity, or hydrogen — including downstream products containing these materials.
- Customs brokers filing declarations on behalf of CBAM-covered importers, who need to confirm CBAM authorisation status before lodging.
- Procurement and supply chain teams evaluating supplier mix in light of CBAM cost impact.
- Sustainability and compliance leads preparing quarterly transitional reports and the annual definitive declaration.
- CFOs and finance teams forecasting working capital impact of surrendered CBAM certificates.
What this tool will do
Dutifi's CBAM Calculator will provide:
- Embedded emissions calculation using the methodologies set out in Commission Implementing Regulation (EU) 2023/1773 — supplier-specific data preferred, with default values as fallback.
- Quarterly CBAM report generation in the official XML format required by the CBAM transitional registry (and the definitive registry from 2026).
- Annual CBAM declaration preparation with verifier-ready evidence packs.
- Certificate cost forecasting at the current EU ETS auction price, with sensitivity analysis at +/- price scenarios.
- Origin-country carbon price credits — calculate the reduction available where a carbon price has been paid in the country of production.
- Supplier emissions data intake — structured workflow for collecting verified emissions data from non-EU producers.
Related Dutifi tools you can use today
While the CBAM tool is in development, Dutifi's AI Customs Broker can already answer specific CBAM questions — embedded emissions methodology, certificate price mechanics, default value tables, and registry workflow. The Document Checklist accounts for CBAM declaration obligations on import routes to the EU for covered goods.