On January 1, 2026, CBAM transitioned from its transitional phase into the definitive phase — importers are now paying real money for carbon certificates. Six months in, are Chinese exporters ready?
What Is CBAM and Why Does It Matter Now?
CBAM (Carbon Border Adjustment Mechanism) is the EU's carbon tariff imposed on imported high-carbon products. From October 2023 to December 2025, the transitional phase required importers only to report emissions data without purchasing certificates. But as of January 1, 2026, CBAM has officially entered its definitive implementation phase:
- Importers must apply to their national competent authority for Authorised CBAM Declarant status
- Purchase CBAM certificates on a quarterly basis, with certificate prices linked to the average auction price in the EU Emissions Trading System (EU ETS)
- In 2026, prices are calculated based on quarterly averages; from 2027 onward, they will be based on weekly averages
In short: starting from 2026, carbon is no longer free. Every tonne of steel, aluminum, cement, fertilizer, electricity, and hydrogen imported into the EU must pay for its carbon emissions.
Which Products Are Covered by CBAM?
CBAM currently covers six major product categories:
| Category | HS Code Range | Typical Export Products |
|---|---|---|
| Iron & Steel | Chapter 72 (partial), Chapter 73 | Steel pipes, bolts, structural steel components, flanges |
| Aluminum | Chapter 76 | Aluminum profiles, aluminum sheets, aluminum home fittings |
| Cement | 2523, etc. | Cement and cement products |
| Fertilizers | Chapters 28, 31 | Nitrogen fertilizers, compound fertilizers |
| Electricity | 2716 | Electricity imports (limited impact on China) |
| Hydrogen | 2804 | Industrial hydrogen |
For Chinese cross-border sellers, the biggest impact comes from iron and steel products, and aluminum products. Many hardware tools, building material fittings, outdoor furniture, and DIY products contain steel or aluminum components — if their HS codes fall within the CBAM scope, your EU importer will need to purchase CBAM certificates for the embedded emissions.
Key threshold: A single importer triggers CBAM obligations when annual import volumes exceed 50 tonnes (by net weight). Below 50 tonnes, no certificate purchase is required, but emissions data must still be reported.
CBAM Implementation Status — Six Months In
As of June 2026, CBAM has been in formal operation for six months. Here are the latest developments:
1. Authorised Declarant System Now Operational
EU member states have opened their CBAM declarant application channels. According to the European Commission's CBAM Definitive Implementation Operational Guide published in March 2026, importers must obtain an authorisation code before goods arrive. Application processes in major importing countries such as Germany, the Netherlands, France, and Italy are relatively mature, though some Eastern European countries are still refining their systems.
2. Carbon Certificate Pricing: Q1 Average Approximately 68 Euros per Tonne
CBAM certificate prices are linked to EU ETS carbon allowance auction prices. In Q1 2026, EU ETS carbon prices fluctuated between 60-75 euros per tonne, with a quarterly average of approximately 68 euros per tonne of CO₂. For example:
- Importing 1 tonne of crude steel (embedded emissions approx. 2.0 tCO₂/tonne) requires purchasing approximately 136 euros in CBAM certificates
- Importing 1 tonne of aluminum (embedded emissions approx. 8.6 tCO₂/tonne, including indirect emissions) requires approximately 584 euros
3. Indirect Emissions Rules Finalized
From 2026, indirect emissions (carbon emissions from electricity consumption) for cement and fertilizers are also included in CBAM calculations. Rules for indirect emissions from steel and aluminum are being phased in progressively.
4. Third-Country Carbon Price Deduction Mechanism
If an exporting country has already imposed a carbon tax (carbon pricing) on products, deductions can be claimed in CBAM declarations to avoid double taxation. China currently has a national carbon market (covering the power generation sector) but it has not yet extended to steel, aluminum, and other industries — Chinese exporters currently cannot benefit from this deduction.
Three Response Strategies for Chinese Exporters
Strategy 1: Map Your Product's Carbon Footprint
The core of CBAM is embedded emissions. Exporters need to calculate the carbon emissions per tonne of product, including:
- Direct emissions: fuel combustion and process reactions during production
- Indirect emissions: emissions corresponding to purchased electricity and heat consumption
If actual measured data cannot be provided, CBAM will apply default values for the calculation — default values are typically higher, meaning greater carbon tariff costs. It is advisable to commission a professional organization for carbon footprint accounting.
Strategy 2: Collaborate with EU Importers
CBAM's legal obligations rest with EU importers, not exporters. In practice, however, carbon tariff costs will inevitably be transmitted through the supply chain:
- Proactively provide emissions data: Helping importers reduce their CBAM costs makes your products more competitive in pricing
- Clearly define carbon tariff cost-sharing in contracts: Avoid disputes arising from carbon price fluctuations
- Monitor whether importers have obtained authorization: If an importer has not applied for CBAM authorization, goods may be detained by customs
Strategy 3: Invest in Low-Carbon Production
In the long term, low-carbon (low-emission) products will enjoy a clear price advantage in the EU market. Every tonne of CO₂ emissions reduced saves approximately 68 euros in carbon tariff costs. Consider:
- Switching to clean energy (solar PV, wind power) in place of coal-fired electricity
- Optimizing processes to reduce energy consumption
- Procuring low-carbon raw materials (e.g., electric arc furnace steel vs. blast furnace steel)
GreenArk (Shenzhen) Certification Co., Ltd. — CBAM Compliance Support
GreenArk (Shenzhen) Certification Co., Ltd. has been focused on EU market access compliance for over eight years. In response to the formal implementation of CBAM in 2026, we offer:
- Product Carbon Footprint Accounting: Assist in calculating embedded emissions for steel and aluminum products, producing data usable for CBAM declarations
- CBAM Compliance Training: Help exporting enterprises understand CBAM rules and complete internal preparations
- Supply Chain Carbon Management Consulting: From carbon emissions data collection to low-carbon supplier screening, building a comprehensive management system
- EU Regulatory Tracking: Continuous updates on CBAM implementation rules and carbon price trends
CBAM is not a one-off certification project — it is a long-term market access cost. The sooner a carbon management system is established, the stronger the competitive edge.
FAQ
Q1: Is CBAM related to CE certification?
There is no direct relationship. CE certification governs product safety, while CBAM governs carbon emission costs. However, both are essential conditions for EU market access — CE ensures compliant market entry, while CBAM affects the cost competitiveness of products in the EU market.
Q2: My products are small hardware items (screws, nuts) — does CBAM apply?
It depends on whether your product's HS code falls within the CBAM scope and whether your EU customer exceeds the 50-tonne import threshold. Screws, nuts, washers, and other iron and steel products (HS 7318, etc.) are within CBAM scope. If your customer's import volume is small (<50 tonnes), certificate purchase is not yet required, but emissions data must still be reported.
Q3: Can CBAM certificates be transferred or banked?
Yes. CBAM certificates can be banked up to an annual cap (up to 30% of the previous year's purchases) and can be transferred between member states. This gives importers some flexibility in managing carbon price fluctuations.
Q4: Will the UK and the US introduce similar carbon tariffs?
The UK launched its UK CBAM on January 1, 2027, with rules similar to the EU's. The US currently has no nationwide carbon tariff, but some members of Congress have introduced relevant legislation. It is advisable to monitor policy developments in your target markets.
Carbon Tariffs Are Not a Future Concern — They Are a Present Reality
The EU CBAM has already been in formal operation for six months. Q3 2026 (July-September) will mark the first full cycle of carbon certificate purchasing and surrender, and a large number of importers will go through this process for the first time. For Chinese exporters, helping your EU customers reduce their CBAM costs is how you secure market share for your products.
Contact GreenArk (Shenzhen) Certification Co., Ltd. today:
- Website: www.greenark-sz.com
- Email: sui@greenark-sz.com
Let us help you with carbon footprint accounting, so your products remain competitive in the EU carbon tariff era.
This article is an original publication by GreenArk (Shenzhen) Certification Co., Ltd. Please credit the source when reprinting. Content is based on publicly available EU regulatory information as of June 2026. For specific compliance requirements, please refer to the Official Journal of the European Union.
