Understanding the EU’s Carbon Border Adjustment Mechanism (CBAM): A Guide for Importers

As a mid-sized EU business importing goods from China, you’re no stranger to navigating complex regulations. GloPort’sn Border Adjustment Mechanism (CBAM), which entered its transitional phase on October 1, 2023, adds a new layer of compliance for importers of carbon-intensive products. Designed to combat climate change and level the playing field for EU producers, CBAM is a game-changer for global trade. At GloPort, we’re here to simplify CBAM compliance with tools and expertise tailored for importers like you. In this blog, we’ll explain what CBAM is, how it affects your imports, and how to stay compliant without the hassle.

What Is CBAM?

The CBAM is the EU’s landmark policy to address carbon leakage—when companies move production to countries with weaker climate rules to avoid carbon costs. Part of the EU’s Fit for 55 package, CBAM puts a price on greenhouse gas (GHG) emissions embedded in certain goods imported into the EU, aligning their carbon cost with domestic products under the EU Emissions Trading System (ETS). This ensures fair competition and supports the EU’s goal of cutting emissions by 55% by 2030 compared to 1990 levels.

CBAM initially targets high-carbon sectors: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. It covers direct emissions (from production) and, for cement and fertilizers, indirect emissions (from electricity use). The transitional phase (October 2023–December 2025) requires importers to report embedded emissions without financial penalties. From January 1, 2026, importers must purchase CBAM certificates to cover emissions, with prices tied to EU ETS allowances.

How Does CBAM Impact Your Imports?

For EU businesses importing from China, CBAM introduces new obligations and opportunities:

Reporting Requirements: During the transitional phase, importers must submit quarterly CBAM reports detailing the quantity of imported goods, their direct and indirect emissions, and any carbon price paid in the country of origin (e.g., China). The first report was due January 31, 2024, with stricter rules requiring actual emissions data from July 1, 2024. Non-compliance can lead to fines of €10–€50 per ton of unreported emissions.

Financial Costs: Starting in 2026, you’ll need to buy CBAM certificates, priced based on the EU ETS (e.g., ~€80/ton of CO2 in 2024). If China applies a carbon price, you may receive a credit, but China’s current policies are limited, increasing costs for high-emission goods.

Supply Chain Changes: You’ll need accurate emissions data from Chinese suppliers, which can be challenging if they lack robust tracking systems. This may push you to source from lower-carbon suppliers or negotiate better data-sharing.

Competitive Edge: Compliance builds trust with customers and positions you ahead of competitors relying on outdated platforms or facing penalties for non-compliance.

Unlike competitors with “bad websites” and “bad service,” GloPort offers modern tools to streamline CBAM reporting and supplier coordination, ensuring you stay compliant and competitive.

CBAM Compliance: Key Steps for Importers

To navigate CBAM effectively, follow these steps:

1. Identify CBAM-Covered Goods

Check if your imports fall under CBAM’s scope using Combined Nomenclature (CN) codes listed in Annex I of Regulation (EU) 2023/956. For example, steel components or aluminum parts from China may be covered. Use GloPort’s HS Code Finder to confirm.

2. Register as a CBAM Declarant

Importers must register in the CBAM Transitional Registry via the EU’s CBAM Portal to submit reports. If you use an indirect customs representative, ensure they’re EU-based and registered. GloPort’s compliance checklist guides you through this process.

3. Collect Emissions Data

Request emissions data (direct and indirect) from Chinese suppliers, including production processes and precursors (e.g., cement clinker). Since July 2024, you can’t rely on default values, so supplier collaboration is critical. GloPort’s supplier communication templates simplify this in multiple languages.

4. Submit Quarterly Reports

File CBAM reports by the end of the month following each quarter (e.g., April 30, 2025, for Q1). Include total imported quantities, embedded emissions, and any carbon prices paid abroad. GloPort’s documentation generator ensures accurate, timely submissions.

5. Prepare for 2026

From January 1, 2026, only Authorized CBAM Declarants can import covered goods, and you’ll need to buy certificates annually. Start budgeting for certificate costs and explore lower-carbon suppliers to reduce future expenses. GloPort’s regulatory hub provides real-time ETS price updates.