The CBAM scheme essentially acts as a tariff on carbon-intensive goods imported into the EU, forcing foreign companies to pay the same price for carbon emissions that would have been paid if the good were made inside Europe. One of the key aims is to stop manufacturers moving their production abroad to countries with weaker environmental laws.
When a high-pollution product enters the EU, the importer must buy a CBAM certificate corresponding to the greenhouse gas emissions embedded in their products. Affected sectors include Iron and steel, Aluminium, Cement, Fertilisers, Hydrogen and Electricity.
The EU started a reporting-only transitional phase in October 2023 and shifted to the financial definitive regime in January 2026. The UK government is introducing its own UK CBAM starting January 1, 2027
Many UK exporters still see CBAM as an EU customer issue, but this carries significant risk as the scheme enters its cost phase and EU importers must purchase carbon certificates, passing costs back through supply chains.
- EU customers will increasingly expect suppliers to provide:
Clear emissions calculations
Transparent methodologies
Supporting evidence and, where required, verification
The assumption that CBAM thresholds remove the need for action is often incorrect. Exporters who prepare early with emissions tracking and verification will be better placed to meet requirements and remain competitive as carbon transparency becomes increasingly important.
The Herefordshire and Worcestershire Chamber of Commerce will offer a consultancy service regarding CBAM to members and non-members. Contact the Chamber to book an appointment: [email protected]
Find out more: CBAM Consultancy Service | Herefordshire & Worcestershire Chamber of Commerce