The European Union is moving closer to the full implementation of the Carbon Border Adjustment Mechanism (CBAM) — a landmark policy designed to equalize carbon costs between EU producers and importers, and to prevent “carbon leakage” from industries relocating to regions with looser environmental standards.

According to a European Commission representative, Brussels is currently working on provisional emission benchmarks to give businesses an early indication of potential carbon costs before the final rules are approved. These preliminary figures are expected to be released in the coming months, while the final methodology and benchmarks are scheduled for adoption in early 2026.

The transitional phase of CBAM, which began in October 2023, runs until the end of 2025. During this period, importers of carbon-intensive goods must report embedded emissions in their products but are not yet required to pay the levy. Starting January 1, 2026, however, companies will need to purchase CBAM certificates corresponding to the carbon content of their imported goods.

At present, CBAM covers cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen — sectors responsible for a major share of industrial CO₂ emissions. Analysts expect the scope to expand over time to include additional energy-intensive industries such as glass, ceramics, and chemicals.

CBAM operates in parallel with the EU’s Emissions Trading System (ETS). European manufacturers, already paying for carbon allowances under the ETS, have long advocated for the mechanism to ensure fair competition and encourage global decarbonization.

Experts say the introduction of CBAM will have far-reaching implications for global trade. Exporters to the EU will need to improve their carbon accounting, invest in cleaner technologies, and reduce emissions — or face higher costs when accessing the European market.

In the words of EU officials, CBAM is not merely a tax, but a “carbon equalization tool”, intended to drive a worldwide shift toward climate-neutral industry.