The EU Carbon Border Adjustment Mechanism (CBAM) is a tariff on the embedded carbon emissions of imported goods. It applies to cement, iron and steel, aluminium, fertilisers, hydrogen and electricity as of January 2026, with more sectors expected to follow.

Who needs to report under CBAM?

EU importers of CBAM-covered goods must declare the embedded greenhouse-gas emissions of each shipment. In practice, the EU buyer asks the non-EU supplier (often an SME) for the emissions data per tonne of product.

How is CBAM embedded-carbon calculated?

It follows the EU's CBAM methodology — broadly the direct and indirect GHG emissions per tonne of product, calculated cradle-to-gate. The methodology is compatible with ISO 14067 and the GHG Protocol Product Standard, so a well-built product carbon footprint covers most CBAM data needs.

What happens if a supplier can't provide CBAM data?

The EU importer falls back to default values, which are deliberately high to incentivise real measurement. Suppliers that can provide verified product-level data become more competitive against suppliers that can't.

CBAM & Product Carbon Footprints: A Supplier's Guide

The EU Carbon Border Adjustment Mechanism (CBAM) is now live. It turns the embedded carbon of imported goods into a customs cost — and pushes the data requirement down the supply chain to the manufacturer. This guide explains what CBAM is, which products are covered, how to calculate the embedded emissions your EU buyer needs, and how a product carbon footprint aligned with ISO 14067 satisfies most CBAM requirements.

What is CBAM?

CBAM is the EU's carbon tariff. It puts a price on the greenhouse-gas emissions embedded in goods imported into the EU, so that EU producers paying the EU Emissions Trading System price are not undercut by imports from countries with weaker climate policy.

CBAM entered its transitional reporting phase in October 2023. The definitive phase began on 1 January 2026: EU importers must now buy CBAM certificates matching the embedded emissions of their imports.

Which products are covered today

Cement
Iron and steel (and downstream steel products)
Aluminium
Fertilisers
Hydrogen
Electricity

The European Commission has signalled extensions to polymers, organic chemicals, and downstream goods later this decade.

What CBAM actually requires

For each shipment of a covered good, the EU importer must declare:

The direct emissions embedded per tonne of product — the GHG emissions from the production process itself.
The indirect emissions — emissions from the electricity used in production, calculated using the manufacturing country's grid factor.
The methodology and data sources used.
Any carbon price already paid in the country of production (deductible).

The numbers come from the supplier. The EU buyer cannot calculate them — only the manufacturer knows the actual process emissions and electricity use.

How CBAM relates to ISO 14067

CBAM's methodology is, in substance, a cradle-to-gate product carbon footprint. The EU's implementing regulation accepts methodologies that are equivalent in rigour to its own — which includes well-built PCFs following:

ISO 14067:2018 (product carbon footprint)
The GHG Protocol Product Standard
Sector-specific PCRs (Product Category Rules) where they exist

In practice: if you can produce an ISO 14067-aligned PCF for your steel, aluminium, cement, fertiliser or hydrogen product, you can answer your EU buyer's CBAM request from the same document.

What suppliers should do now

Calculate the cradle-to-gate PCF per tonne for every CBAM-covered product you export to the EU.
Separate direct from indirect emissions — CBAM requires both figures.
Document your data sources — site-specific energy and material data beats generic factors every time, and CBAM defaults are deliberately punitive.
Track any domestic carbon price paid — it's deductible against the CBAM certificate cost.
Be ready to update annually — CBAM declarations are not one-off.

Why this matters commercially

EU buyers face a choice: pay for CBAM certificates based on the supplier's real emissions, or fall back to the EU default values (which are set high on purpose). Suppliers who provide verified low-carbon data become cheaper to import than suppliers who can't — even if the underlying product cost is identical. CBAM is the first major regulation to make a credible product carbon footprint a direct commercial advantage rather than a reporting overhead.

Answering a CBAM data request

If an EU customer has emailed you asking for embedded emissions, start with our CBAM supplier data guide — it lists field by field what the importer must report, and what each field means on your shop floor.

To produce the underlying numbers, the ISO 14067-aligned product carbon footprint calculator builds a cradle-to-gate footprint from your bill of materials, inbound transport, site energy and packaging. It separates the stages, records every emission factor with its database and dataset year in a factor register, and prints a report you can attach to your reply. It is free and needs no account to produce the PDF.

CBAM and your product's carbon footprint