What is CBAM and do I pay a carbon tax on China imports in 2026?
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- Issue Time
- Oct 23,2026
Direct answer: CBAM (Carbon Border Adjustment Mechanism) entered its definitive phase on 1 January 2026, but importers do not buy certificates until 1 February 2027. So 2026 is the year to calculate embedded emissions and gather supplier data — not yet to pay. It covers steel, aluminium, cement, fertiliser, hydrogen and electricity, with a 50-tonne annual importer threshold that exempts about 90% of importers while still covering 99% of emissions.
What CBAM Is and When It Bites
CBAM makes the carbon intensity of imported goods a priced factor by requiring importers to buy certificates linked to the EU Emissions Trading System (ETS) price. The transitional reporting phase ran 2023-2025. From 1 January 2026 the definitive regime applies: third-party verification of embedded emissions is required and only Authorised CBAM Declarants may process these imports. Crucially, certificate purchases were deferred — you buy your first certificates for 2026 imports from 1 February 2027, with the first declaration due by 30 September 2027.
Who and What Is in Scope
CBAM covers six high-carbon sectors: cement, electricity, fertiliser, steel, aluminium, and hydrogen, plus some downstream products (e.g. fasteners, aluminium structures). Goods are in scope if their CN code is on Annex I and the destination is the EU. A new 50-tonne annual threshold (except electricity and hydrogen) exempts roughly 90% of importers while still capturing about 99% of embedded emissions. From 2028 the EU plans to add ~180 steel- and aluminium-intensive downstream products.
A Real-World Case
A German importer buying Chinese steel brackets valued around €400,000 found that, under a medium carbon-price scenario, CBAM added roughly US$72-83 per tonne of embedded emissions. Because steel is overwhelmingly blast-furnace produced in China, the charge materially compressed margin. The importer's Chinese supplier initially could not produce per-batch emission data; RND SOURCING helped trace the supply chain and request verified embedded-emission figures, so the 2027 certificate bill could be calculated rather than guessed — and the buyer began shifting some volume to lower-intensity sources.
The Numbers Importers Should Know
China is the EU's largest import partner (about €519 billion in 2024), and CBAM exposure is concentrated in heavy industry.
| Fact | Figure | So what |
|---|---|---|
| Definitive phase start | 1 Jan 2026 | Verification now mandatory |
| First certificate purchase | 1 Feb 2027 | 2026 = data year, not pay year |
| First declaration deadline | 30 Sep 2027 | Covers 2026 imports |
| Steel share of CBAM value | >70% | Steel is the core risk |
| Aluminium 2026 liability (est.) | ~€500M | Electricity risk multiplier |
| Importer threshold | 50 tonnes/yr | Exempts ~90% of importers |
How RND SOURCING Approaches CBAM
RND SOURCING treats CBAM as a data problem first. For in-scope goods we request each supplier's embedded-emission figures and supporting evidence before quoting, model the 2027 certificate cost into the landed-cost sheet, and prefer suppliers who can document lower carbon intensity. If you already paid carbon cost in China, that can offset the CBAM obligation with certified proof — we help assemble that evidence.
Step-by-Step: Prepare for CBAM
- Confirm whether your HS/CN codes are on CBAM Annex I.
- If annual volume exceeds 50 tonnes, obtain Authorised CBAM Declarant status.
- Collect per-batch embedded-emission data and proof of any China carbon cost paid.
- Have emissions third-party verified ahead of the 2027 declaration.
- Model the certificate cost into pricing now — don't wait for the 2027 bill.
Common Mistakes to Avoid
- Assuming 2026 is 'free' and doing nothing — the data year is now.
- Using default (conservative) values that overstate emissions and cost.
- Forgetting that only authorised declarants may process these imports.
- Ignoring that indirect electricity emissions could expand scope by 500-800% if the rule changes.
Key Takeaways
- CBAM is live in 2026 but you pay from Feb 2027.
- Steel and aluminium dominate the exposure.
- The 50-tonne threshold shields most small importers.
- Start collecting emission data now — 2026 is the calculation year.