As of 31 March 2026, companies importing carbon intensive goods into the European Union reached a defining moment: the deadline to submit their application to become an authorised CBAM declarant. For many businesses, this marked the transition from preparing for the Carbon Border Adjustment Mechanism to operating within it.
The date also aligns with a key milestone in the EU Emissions Trading System (ETS), whose monitoring and reporting deadline also falls on 31 March. Both systems ultimately address emissions generated within Europe, and CBAM emerges as a response to earlier market distortions in which the ETS was seen as placing a heavier burden on local manufacturers compared to foreign producers. With CBAM now in its fully binding phase, the stakes are no longer theoretical, they are operational, financial and immediate.
CBAM, the EU's new carbon pricing mechanism for imports, aims to ensure that goods entering the EU market bear a carbon cost equivalent to what local manufacturers pay under the Emissions Trading System. The logic is straightforward: if European companies must pay for their carbon footprint, imported goods should not be able to bypass that cost.
The policy prevents carbon-intensive production from shifting abroad and preserves fair competition across the single market. Introduced as a central pillar of the EU’s Fit for 55 climate strategy, CBAM became financially binding on 1 January 2026, supported by the updated legislative framework under Regulation (EU) 2023/956 and the Simplification Regulation adopted in late 2025.
Why Does This Matter?
The first step in operating under CBAM is obtaining authorised declarant status. Without it, businesses importing more than 50 tonnes per year of CBAM covered goods, such as cement, iron and steel, aluminium, fertilisers, hydrogen and electricity, cannot continue importing provisionally. And although the mechanism starts with a modest financial impact of 2.5% this year, it will scale to 100% by 2034 in parallel with the phaseout of free ETS allowances (depending on the industry you are working in). Failure to comply can lead to penalties of €100 per tonne of CO₂ equivalent, as well as the risk of customs authorities interrupting import activities altogether.
The scope of CBAM is already broad, but it is set to grow. From 2028 onwards, the European Commission plans to extend the mechanism to around 180 downstream products containing steel or aluminium, ranging from machinery to vehicle components and construction materials. Discussions are also underway on future inclusion of organic chemicals and polymers. For companies with global supply chains, CBAM is therefore not a temporary compliance exercise but a long term operational and procurement consideration.
Timeline: Way Forward
1 January 2026 - CBAM's definitive phase begins; financial obligations apply.
31 March 2026 - Authorised declarant application deadline.
1 February 2027 - Start of CBAM certificate sales for 2026 imports.
30 September 2027 - First annual CBAM declaration and certificate surrender.
1 January 2028 - Planned scope extension + increase in default value mark-ups to 30%.
2026 - 2034 - Gradual transition from 2.5% to 100% CBAM cost exposure.
At Grant Thornton, we recognise that navigating CBAM is not just about meeting deadlines; it's about building a workable, repeatable process that integrates carbon data into your operations.
That's why we support clients from the first question: "Does this apply to us?", through to ongoing compliance.
Our team reviews import portfolios to confirm whether goods and volumes fall under CBAM, supports businesses through the declarant registration process, and provides indicative cost estimates so companies can budget for the year ahead.
Once imports begin, we calculate certificate requirements shipment by shipment, incorporate supplier verified emissions as they become available and help clients embed CBAM into their regular workflows.
CBAM will continue to evolve, becoming more complex and more integrated into global carbon pricing systems over time. Early movers, those who build robust processes today, will not only avoid penalties but also gain strategic advantage in an increasingly carbon transparent market.
If you are still finalising your declarant application or preparing your internal processes, our team is ready to guide you through the next steps.
Navigating the evolving compliance and cost implications of the Carbon Border Adjustment Mechanism (CBAM) can be complex. Our team works with organisations to clarify regulatory requirements, assess data readiness and control frameworks, and strengthen processes across the import and reporting lifecycle.
If you would like to discuss what these developments mean for your business, our team is here to help!
Francesca Vella
