CBAM is not legally defined as a tax. It is a carbon pricing mechanism requiring importers to purchase certificates reflecting the embedded emissions of goods entering the EU.
The EU Carbon Border Adjustment Mechanism (CBAM) introduces new obligations for importers and manufacturers supplying carbon-intensive goods to the EU. From quarterly reporting during the transitional period (2023–2025) to full verification requirements from 2026, all declarants must ensure ongoing compliance with the methodologies and procedures established in the CBAM Regulation and its implementing acts. Verification requirements apply only to companies reporting with actual emissions data.
SGS provides trusted, independent CBAM services, combining deep regulatory knowledge, global technical expertise and decades of experience in EU ETS verification.
How will your organization benefit from CBAM reporting with actual values?
- Reduce your financial burdenDefault value, as laid out in the Commission Implementing Regulation and its Annexes, published on December 16, 2025, is punitive. If your production process is cleaner, verified actual values reduce your CBAM exposure.
- Improve operational efficiencyReporting with actual values provides operational insights, eases the identification of inefficiencies and opportunities for decarbonization, and helps improve productivity.
- Enhance credibility and trustVerified actual values show investors and customers that your organization is serious about compliance and sustainability. This builds long-term trust.
- Future-proof your organization against further associated regulatory changesEstablishing CBAM compliant systems to collect, monitor and account for emissions prepares your business for upcoming CBAM scope expansion and/or implementation of similar mechanisms in other exporting markets.
What is CBAM and how does it work?
The Carbon Border Adjustment Mechanism (CBAM) is an EU regulation designed to prevent carbon leakage by ensuring that imported goods with significant embedded emissions are subject to a carbon price equivalent to that applied under the EU Emissions Trading System (EU ETS). It is being implemented in stages, beginning with a transitional period, which concluded on December 31, 2025, followed by the definitive regime.
From January 1, 2026, the definitive CBAM regime enters into force. Importers must submit annual CBAM declarations covering embedded emissions in goods imported during the reporting year.
The definitive period introduces accredited third-party verification requirements exclusively to importers reporting with actual emissions data. Importers relying on default values are not subject to verification.
Financial obligations also begin in 2026. Importers must purchase and surrender CBAM certificates in 2027 corresponding to the embedded emissions of goods imported in 2026.
Which industries and products are covered by CBAM?
CBAM currently applies to selected sectors:
- Iron and steel
- Cement
- Aluminum
- Fertilizers
- Hydrogen
- Electricity
The 2025 CBAM Package, released on December 17, includes a proposal for a scope extension to downstream finished and semi-finished steel and aluminum downstream goods.
We support importers, manufacturers, traders and integrated supply chains across all affected sectors.
How we prepare you for CBAM compliance
We help you meet regulatory obligations, reduce your administrative burden and prepare for long-term compliance. Our CBAM compliance services include CBAM pre-verification and training.
CBAM pre-verification
CBAM pre-verification is an early and voluntary assessment to check whether emissions data and monitoring systems are consistent with CBAM regime requirements. It is a third-party independent non-accredited service to help exporters test their emissions monitoring and reporting system against CBAM requirements.
Undergoing pre-verification during 2026 provides the following benefits:
- Errors and inconsistencies in emissions monitoring and reporting are detected, giving suppliers sufficient time to correct them
- Dry runs allow your company to estimate potential CBAM charges using actual values, supporting cost forecasts
- The risk of having to fall back on less favorable default values is reduced
- Pre-verification builds familiarity with the CBAM verification process
CBAM training
We provide clear and practical guidance on:
- Process flows and system boundaries
- Methodologies and sector-specific requirements
- Monitoring plans
Accreditation of verifiers
The Commission Delegated Regulation on Accreditation of Verifiers (20/11/2025) sets the framework for accreditation of CBAM verifiers:
- European Certification Bodies (CBs) shall request the accreditation to their National Accreditation Body (NAB), unless that scope is not offered
- Non-European Certification Bodies (CBs) shall request the accreditation to any European Accreditation Body
- A verifier already accredited to EU ETS for the relevant group of activities may apply for an extension of the scope of its accreditation to the relevant CBAM activity groups
- The Annex to the Regulation includes an Annex that lists the CBAM scopes as well as the requirements for verifiers
SGS is an EU ETS‑accredited verifier in various EU member states. SGS intends to apply for an extension of the scope of the ISO/IEC 17029 accreditation to include CBAM in the future, subject to assessment by the relevant accreditation body.
Why choose SGS?
We are a world leading provider of greenhouse gas (GHG) verification, with decades of emissions trading system (ETS) experience across all sectors. Our global footprint allows us to support suppliers and operations worldwide. As a trusted, independent verifier, with strict quality and integrity standards, we offer a comprehensive set of services that includes practical operational guidance based on real world challenges.
Frequently Asked Questions
Importers must report emissions quarterly during the transitional period, then purchase CBAM certificates from 2027 reflecting the embedded carbon emissions of the goods imported in 2026. Certificates reflect the difference between the EU carbon price and any carbon price paid in the country of origin.
Currently, CBAM focuses on selected raw materials and certain downstream products, especially in the iron and steel and aluminum sectors. These goods include bolts, screws, car fasteners, washers, etc. The EU Commission Proposal for a Regulation amending Regulation (EU) 2023/956, published on December 17, 2025, includes certain steel and aluminum carbon intensive downstream goods in the CBAM scope.
Under the EU’s Carbon Border Adjustment Mechanism (CBAM), different goods have distinct rules for how their embedded greenhouse gas (GHG) emissions are calculated and reported. These rules vary based on the type of product, the gases involved, and whether direct or indirect emissions are included.
For cement, the focus is on carbon dioxide only. It includes direct and indirect emissions, and reporting is on tons of cement imported. Fertilizers are slightly more complex, since they involve not only carbon dioxide but also nitrous oxide for certain products, direct and indirect emissions, and reporting based on the tons of fertilizer imported. Iron and steel are measured by the ton as well, but here only direct carbon dioxide emissions are covered. Aluminum is similar, though in addition to carbon dioxide, perfluorocarbons are included for some aluminum goods. Hydrogen is reported by the ton and covers carbon dioxide emissions, while electricity is measured in megawatt hours and covers direct carbon dioxide emissions only.
We support compliance readiness with pre-verification and training