The Carbon Border Adjustment Mechanism (CBAM) represents one of the most significant trade compliance developments affecting UK-EU trade in recent years. Introduced as part of the EU's European Green Deal, CBAM places a carbon cost on certain goods imported into the EU — creating direct compliance obligations for exporters. WHAT IS CBAM? CBAM is designed to prevent carbon leakage — the risk that EU climate ambitions are undermined by imports from countries with less stringent carbon pricing. It applies a carbon price to imports of specific goods based on the carbon content of their production. WHICH GOODS ARE AFFECTED? The initial scope covers: steel and iron products, aluminium, cement, fertilisers, electricity, and hydrogen. The scope is expected to expand in subsequent phases. THE TRANSITIONAL PHASE (2023–2025) During the transitional phase, EU importers must report the embedded carbon emissions of covered goods without making financial payments. This reporting phase allows businesses to build compliance infrastructure. FULL IMPLEMENTATION FROM 2026 From 1 January 2026, EU importers will be required to purchase CBAM certificates corresponding to the carbon content of imported goods. UK exporters supplying these categories to EU customers should expect their EU buyers to require detailed carbon content data. PRACTICAL STEPS FOR UK EXPORTERS 1. Identify whether your goods fall within CBAM scope 2. Establish carbon accounting and monitoring processes 3. Engage with your EU customers to understand their reporting requirements 4. Consider third-party verification of carbon content data 5. Monitor CBAM scope expansion — additional product categories are expected post-2026 CUSTOMS COMPLIANCE OVERLAP CBAM compliance sits alongside standard EU customs declaration requirements. Businesses already managing EU customs declarations should review how CBAM data requirements integrate with their existing compliance processes. FOR FURTHER GUIDANCE TCSA's procurement service can assist in identifying trade compliance consultants with specialist CBAM expertise. Submit a procurement brief through the TCSA Procurement Services page.