CBAM glossary

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CBAM(Carbon Border Adjustment Mechanism)

The EU mechanism pricing the embedded emissions of selected carbon-intensive goods imported into the EU, so that imports carry the same carbon cost as EU production. Legal basis: Regulation (EU) 2023/956.

Transitional period

1 October 2023 – 31 December 2025. Importers only filed quarterly reports; no financial obligation applied. This period has ended.

Definitive period

The period that began on 1 January 2026. Imports may only be made by authorised CBAM declarants, and certificate purchase and annual declaration obligations phase in.

Authorised CBAM declarant

The person or company authorised to import CBAM goods into the EU. Application is made to the competent authority of the member state where the importer is established. From 1 January 2026, CBAM goods cannot be imported without this status (exemptions aside).

Indirect customs representative

A representative lodging the customs declaration in their own name on behalf of an exporter established outside the EU. CBAM obligations can be taken on by the indirect customs representative instead of the importer.

CBAM declaration

The annual declaration by the authorised declarant for the previous calendar year’s imports: quantities, embedded emissions, certificates surrendered and any carbon price paid in the country of origin. The first declaration, covering 2026 imports, is due by 30 September 2027.

CBAM certificate

An electronic certificate corresponding to one tonne of CO₂e of embedded emissions, bought at the Commission-published price — the weighted average of EU ETS auction clearing prices.

Embedded emissions

The greenhouse gases released in producing a good — the emissions "imported" with the product. Includes direct emissions, indirect emissions in some sectors, and the embedded emissions of precursors in complex goods.

Direct emissions

Emissions from the production process itself: fuel combustion, process emissions (e.g. calcination), and the production emissions of heat and cooling consumed in production.

Indirect emissions

Emissions from generating the electricity consumed in production. Currently priced only for cement and fertiliser goods; for iron & steel, aluminium and hydrogen, only direct emissions count under Annex II of the Regulation.

Default value

The embedded-emissions value published by the Commission per country × CN code, applied when no verified actual data comes from the producer. A mark-up is added on top, rising by year: 10% in 2026, 20% in 2027, 30% in 2028 (1% for fertilisers).

Simple good

A good whose production requires no CBAM-scope precursors (e.g. clinker). Its embedded emissions are calculated from its own production process only.

Complex good

A good whose inputs include CBAM-scope precursors (e.g. rolled products from crude steel, cement from clinker). The precursors’ embedded emissions are added to the good’s total.

Precursor

An input material that is itself a CBAM good, used in producing a complex good — pig iron and DRI in steel, clinker in cement, unwrought aluminium in aluminium products.

CN code

The EU Combined Nomenclature customs code. CBAM scope and default values are defined by CN code; you can find your product’s code on your customs declaration.

Specific embedded emissions (SEE)

The embedded emissions of a good per tonne (tCO₂e/t). An actual SEE calculated from installation data can replace the default value once verified.

Monitoring period

The period over which actual data is collected — as a rule, the calendar year. The installation’s emissions and production quantities are monitored over this period and converted to per-product emissions.

Calculation-based approach

Determining emissions by multiplying activity data (fuel/material quantities) with emission factors. Standard factors are published in the methodology annexes.

Mass balance

A calculation method tracking carbon entering and leaving the process; used where carbon inputs are multi-sourced, as in steel and primary aluminium. Mandatory for CO₂ from primary aluminium.

Measurement-based approach

Determining emissions by continuous measurement in the flue gas (CEMS). The standard method for some emissions such as N₂O.

Verification

Review and confirmation of actual emissions data by an accredited verifier. Declaring with actual data instead of defaults is only possible with verified data.

CBAM registry

The Commission’s electronic system for CBAM operations. Non-EU installation operators can upload installation and emissions data once via the operator module (O3CI) and share it with multiple declarants.

Central platform

The common platform on which CBAM certificates will be bought from February 2027. Prices move from quarterly to weekly publication in the same period.

50-tonne exemption(De minimis threshold)

The mass threshold exempting importers of less than 50 tonnes of CBAM goods per year from the authorisation obligation. Hydrogen and electricity imports are excluded from this exemption.

Carbon price paid in the country of origin

A carbon tax or ETS payment effectively paid in the origin country for the good’s embedded emissions. Under Article 9 it can be deducted in the declaration; amounts covered by free allocation or refunded do not count as "effectively paid".

EU ETS

The EU Emissions Trading System — the cap-and-trade system covering EU installations. The CBAM certificate price is derived from ETS auction prices.

Free allocation

Emission allowances given to ETS installations free of charge. Being phased out in CBAM sectors in the EU from 2026, with the CBAM obligation phasing in on the same schedule.

Benchmark

A reference emissions value representing the most efficient production in a product group. Some default-value rows carry a route indicator (A–L) tied to the production route.

tCO₂e

Tonnes of CO₂ equivalent. Non-CO₂ greenhouse gases (e.g. N₂O, PFCs) are converted to CO₂ equivalents via their global warming potentials and summed.

PFC emissions

Perfluorocarbons (CF₄, C₂F₆) formed during anode effects in primary aluminium electrolysis. They have very high warming potentials and are reported as part of direct emissions in aluminium.

N₂O emissions

Nitrous oxide, the dominant greenhouse gas of nitric acid production. A major part of embedded emissions in the fertiliser chain, reported with its own monitoring method.

Communication template

The Excel template published by the Commission for installation operators to transmit emissions data to importers in a standard format. See our guide for details.

EPD

Environmental Product Declaration — a verified declaration reporting a product’s life-cycle environmental impacts in a standard format (EN 15804/ISO 14025). A different framework from CBAM reporting, but fed by the same installation data.

LCA

Life Cycle Assessment — calculating a product’s environmental impacts from raw materials to end of life (ISO 14040/44). The computational basis of EPDs and product carbon footprints.

Product carbon footprint (PCF)

The total life-cycle greenhouse gas emissions of a product (ISO 14067). Different in scope and rules from CBAM’s embedded emissions — the two are not interchangeable.