Understanding EU CBAM
CBAM SERVICES
Understanding EU CBAM: What UK Businesses Need to Know
The Carbon Border Adjustment Mechanism (CBAM) is a regulatory measure introduced by the European Union (EU) to prevent carbon leakage and encourage greener global trade practices. By imposing a carbon price on imported goods, CBAM ensures that imported products face similar carbon costs as EU-manufactured goods, promoting fair competition and emissions reductions.
The British Chambers of Commerce (BCC) supports UK businesses in understanding and complying with CBAM through its CBAM Consultancy Service, helping exporters and importers adapt to these new requirements.
Preventing Carbon Leakage
CBAM aims to prevent businesses from moving production to countries with lower environmental standards to avoid carbon costs or replacing EU-produced goods with higher-carbon imports. By ensuring imported products carry equivalent carbon costs, CBAM supports global carbon reduction efforts.
Encouraging Sustainability
By imposing a carbon price on imports, CBAM incentivises non-EU countries to adopt cleaner production methods to remain competitive in the EU market.
Scope
CBAM applies to carbon-intensive industries, including:
Iron & steel, Cement, Aluminium, Fertilisers, Electricity and Hydrogen.
Compliance and Financial Requirements
Reporting (2023-2025): During the transitional phase, EU importers must submit quarterly reports detailing the embedded emissions of imported products.
Full Implementation (from 2026): EU importers must purchase CBAM certificates to account for any emissions that were not subject to a carbon price in the country of origin.
UK Exporter Responsibility: UK exporters must provide accurate emissions data to their EU importers to ensure compliance. Without verified emissions data, UK exporters may encounter challenges such as increased compliance costs, trade delays, or reduced market access in the EU.
How UK Exporters Can Calculate CBAM Emissions
UK businesses exporting to the EU must calculate and report the carbon emissions embedded in their products. This includes:- Direct Emissions – Carbon emissions from the production process (e.g., energy used in manufacturing).
- Indirect Emissions – Carbon emissions from electricity used during production.
- Carbon Pricing Considerations – Any carbon tax or emissions cost already paid within the supply chain must be documented.
For UK Exporters:
- Provide Verified Emissions Data – EU customers will require this information to purchase CBAM certificates.
- Maintain Competitive Access to EU Markets – Inaccurate or missing emissions data could disrupt supply chains.
- Prepare for Future UK Legislation – The UK is expected to introduce similar carbon border regulations from 2027.
For EU Importers:
- Quarterly Emissions Reporting – Mandatory until full implementation in 2026.
- Purchase of CBAM Certificates – Required from 2026 to cover any unpaid carbon costs.
CBAM Compliance Timeline
The British Chambers of Commerce (BCC), through its customs and trade team, ChamberCustoms, offers a unique CBAM Consultancy Service that is helping UK businesses adapt to the European Union’s Carbon Border Adjustment Mechanism (CBAM).
The service includes:
- Expert-led CBAM assessments – Helping businesses understand their emissions impact.
- On-site or remote consultancy – Support tailored to your operational needs.
- Custom reporting frameworks – Ensuring your business provides accurate emissions data.
- Specialist software solutions – Managing and tracking emissions calculations.
- Reduce administrative burdens for your EU importers, ensuring smooth trade.
- Identify areas for emissions reductions, making UK exports more cost-effective under CBAM.
- Stay ahead of regulatory changes, preparing for future UK carbon reporting requirements.