CBAM’s definitive regime is here: what changes on 1 January 2026 and what businesses  should do now. 

After months of anticipation, the EU’s Carbon Border Adjustment Mechanism (CBAM) has  moved into its “definitive regime”. From 1 January 2026, CBAM is no longer just a reporting  exercise, it’s a compliance framework that will shape how in-scope goods compete in the  European market.

Alongside this shift, the European Commission (EC) has published Implementing  Regulations targeted primarily at EU-based importers of record. But make no mistake, producers and exporters outside the EU should also pay close attention. These rules will  influence what your EU customers ask for, how your goods are priced, and whether your  products remain commercially viable once the costs and administrative obligations bite.

Below is what’s changing, and where businesses should focus first. 

1) CBAM is now aligned with the EU ETS and that changes emissions boundaries 

One of the most important updates is the closer alignment between CBAM and the EU  Emissions Trading Scheme (ETS).

What that means in practice 

The calculation of “embedded emissions” now mirrors ETS system boundaries. During the  CBAM transitional period (2023–2025), certain processing techniques, particularly in iron and  steel and aluminum (e.g., cutting, welding, finishing) needed to be considered in emissions  reporting.

Under the definitive regime, CBAM follows ETS logic, meaning these techniques are excluded from CBAM reporting boundaries and no longer need to be accounted for when calculating  direct emissions at the production facility.

Why it matters: this can simplify data collection for some installations, but only if teams update  their internal methodologies. Using an “old” boundary approach may lead to wasted effort or  inconsistent numbers that raise questions during verification.

2) Embedded emissions: more clarity, more flexibility, especially for precursors 

For many installations (the official CBAM term for production sites), embedded emissions  calculations have been difficult especially when precursor emissions data isn’t available.

The EC’s Implementing Regulation provides helpful clarification: 

• Default figures can be used when calculating final embedded emissions, whether you  are primarily using actual data or default data.
• Where multiple precursors are used to create a final product, you can use a mix of  actual values and defaults, improving practical flexibility.

Practical takeaway: installations can now build a “best available” dataset, without being  blocked by a single missing precursor value, while still working towards fuller actual data  coverage over time. 

3) Default figures are now usable and they’re country-specific (and rising) 

Default values have been revised for the definitive phase.

What’s changed from the transitional phase

During the transitional phase, published default figures were essentially a guide; they could not  be used as the basis for CBAM reporting in the same way. From 2026 onward, businesses can  use the revised defaults when actual figures are unavailable.

Key characteristics of the new defaults 

• They are country specific.
• They have been marked up to reduce under-reporting risk.
• They will increase incrementally each year.

This is not a friendly safety net. Over-reliance on defaults is likely to inflate your embedded  emissions and push up your CBAM exposure.

And there’s a sting in the tail. If origin is unknown, the highest available default for that  commodity may apply.

Bottom line: defaults may keep trade moving, but they can quickly make goods look “dirtier”  than they really are. Reducing competitiveness and potentially increasing border costs over  time. 

4) CBAM certificates: obligations start in 2027, but preparation starts now 

A major operational relief: surrendering CBAM certificates won’t begin until 2027. The 2026 “one-off” simplification

• 2026 is effectively a preparatory compliance year under the definitive regime.
• The first surrender deadline is scheduled for 1 February 2027.
• After that, CBAM certificate holding becomes an annual requirement.

Pricing mechanics 

• In the first year of the definitive phase, CBAM certificate pricing is set quarterly, based  on the average ETS allowance price.
• From 2027, the pricing moves to a weekly average.

The EC has also published CBAM benchmarks, which determine how much “free allowance  adjustment” may apply to imported CBAM goods (reflecting the gradual phase-out of free ETS  allocations in the EU).

Why this matters for data strategy: if you rely on default values, you may also reduce the  effectiveness of benchmark-based free allowance adjustments. Again making your import  position less favorable than it needs to be. 

5) Authorised CBAM declarants and verification: expect a stronger assurance regime 

From 2026 onward, where actual data is used, it must be verified annually to remain eligible  for use in CBAM declarations.

Verification expectations 

• Verifiers will need to carry out an on-site visit to the installation in the first year.
  • Subsequent years may allow for virtual audits, depending on circumstances.
  • Verifiers must be accredited by a national accreditation body.

Separately, importers who applied to become an authorised CBAM declarant up to March  2026 can continue importing CBAM goods during the interim, provided they use the correct  classification and processes (including the right codes, below).

6) TARIC codes are now central to keeping CBAM goods moving 

The EC has introduced specific TARIC codes that must be included on customs declarations to  continue moving CBAM-scope goods into the EU. 

This is not just a customs formality. It’s how authorities will identify the importer’s CBAM status,  exemptions, and compliance pathway. 

Watch out for DDP shipments 

Exporters using Delivery Duty Paid (DDP) Incoterms need to be especially careful. Under  DDP, the exporter can become the importer of record into the EU, meaning CBAM compliance  obligations can land with the exporter, not the customer.

If you ship DDP, speak to your customs representative or freight forwarder now to confirm: 

• Who is importer of record. 
• Who will be the authorised CBAM declarant (where required). 
• How CBAM reporting and data flows will be handled contractually. 

CERTEX integration and thresholds 

CBAM monitoring is also becoming more automated. Customs declarations and thresholds will  be integrated via the CERTEX platform. Helping competent authorities monitor weight limits and trade flows closely.

Key TARIC codes (examples) 

• Y128 – Importer is an authorised CBAM declarant; CBAM account number entered on  the customs declaration.
• Y137 – De Minimis exemption (under 50 metric tonnes of CBAM imports for the  calendar year). 
• Y237 – Goods of EU origin. 
• Y238 – Application submitted to become an authorised CBAM declarant (approval  pending).

Other TARIC codes apply to specific goods/scenarios, but the direction is clear: importers  must now declare which TARIC code is used on CBAM-scope goods going forward.

What should businesses do next? 

Whether you’re an EU importer, a non-EU producer, or an exporter trading on DDP terms, the  same theme applies data and process readiness will define competitiveness.

A practical starting checklist: 

• Map CBAM scopes across your product portfolio and supply chain. 
• Align emissions calculations to ETS-style system boundaries for 2026. 
• Priorities actual data collection, especially for precursors. 
• Treat defaults as a temporary bridge, not a long-term strategy. 
• Plan verification early, including first-year on-site requirements. 
• Confirm importer-of-record status, especially under DDP. 
• Embed TARIC code logic into customs processes and broker instructions. 
• Prepare for certificate costs ahead of 1 February 2027 

CBAM is now a trade reality, not a policy concept. Businesses that operationalise emissions  data, verification, and customs readiness in 2026 will be best placed to avoid surprises at the  border and protect their market position in Europe.