prodchem
Aug 25, 2026
The EU's Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on 1 January 2026, moving the policy from a reporting-focused transitional period into a system that creates actual financial obligations for importers. For chemical supply chains, the change is particularly important because fertilisers and hydrogen are currently within CBAM's scope, while the mechanism remains focused on six sectors: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. (Taxation and Customs Union)
One of the most consequential changes is the new 50-tonne annual threshold. Importers bringing more than 50 tonnes of covered CBAM goods into the EU in a calendar year generally need to become authorised CBAM declarants. Electricity and hydrogen imports are treated differently and are subject to the authorisation requirement regardless of the 50-tonne threshold. (Taxation and Customs Union)
The CBAM transition can be divided into two periods:
2023–2025:
Monitoring and reporting of embedded emissions.
From 1 January 2026:
Definitive CBAM regime, including financial obligations.
Under the definitive system, importers must declare the embedded emissions associated with covered imports and ultimately surrender the corresponding CBAM certificates. (Taxation and Customs Union)
This makes 2026 a major operational change for chemical importers.
CBAM is no longer simply:
"Tell the EU how much carbon was embedded in the product."
It is increasingly:
"Quantify the carbon, calculate the obligation and account for its cost."
The threshold is 50 tonnes of CBAM goods per importer per calendar year.
It is important to understand that this is not a 50-tonne threshold for each individual shipment or product.
An importer could therefore have multiple smaller shipments that collectively exceed 50 tonnes during the year.
Once the applicable annual threshold is exceeded, the importer can fall within the authorisation and compliance framework. The European Commission says customs systems monitor the threshold at import. (Taxation and Customs Union)
Suppose an EU company imports:
20 tonnes of covered fertiliser in January
15 tonnes in April
18 tonnes in September
Total:
53 tonnes
The company has crossed the 50-tonne annual threshold.
This means procurement teams cannot assess CBAM exposure shipment-by-shipment alone. They need an annual import-volume view.
The immediate relevance to chemicals is concentrated in fertilisers and hydrogen.
For a fertiliser importer, for example, the procurement calculation increasingly becomes:
Product price + freight + insurance + customs costs + CBAM carbon cost
rather than simply:
Product price + logistics
That changes supplier comparisons.
A supplier offering the lowest FOB price may not provide the lowest CBAM-adjusted landed cost.
A simplified procurement model is:
CBAM-adjusted landed cost = Product cost + Logistics + Duties + CBAM cost
The CBAM component depends on the embedded emissions of the imported product and the applicable certificate price.
The European Commission links the CBAM certificate price to EU ETS allowance prices. In 2026, certificates use a quarterly average; from 2027, the calculation moves to a weekly average. (Taxation and Customs Union)
For 2026, the Commission has published:
Q1 CBAM certificate price: €75.36
Q2 CBAM certificate price: €75.28 per tonne of CO₂
The Q3 price will be published after the quarter ends. (Taxation and Customs Union)
This makes carbon intensity a measurable procurement variable.
Importers need information about the emissions embedded in their products.
The European Commission allows importers to use actual emissions data or Commission default values, subject to the applicable rules. If actual values are used, the producer in the third country needs to provide the relevant emissions information and verification requirements apply. (Taxation and Customs Union)
This creates a new supplier-information requirement.
A chemical buyer may now need to ask its supplier:
What is the embedded CO₂ intensity?
What production process is used?
What feedstock is used?
What energy source is used?
Can verified emissions data be provided?
Is the emissions methodology compatible with CBAM requirements?
This is where CBAM becomes more than a compliance mechanism.
Imagine two overseas fertiliser producers:
Producer A
Product price: lower
Carbon intensity: high
Producer B
Product price: slightly higher
Carbon intensity: significantly lower
Producer A may initially appear cheaper.
But after adding the carbon cost, Producer B could become more competitive.
This creates a potential market incentive:
Lower emissions → lower CBAM exposure → potentially lower delivered cost
That could gradually influence international chemical investment and sourcing decisions.
CBAM is designed to avoid charging an equivalent carbon cost twice.
The European Commission states that if an importer can demonstrate that a carbon price has already been paid in the country of production, the corresponding amount can be deducted from the CBAM obligation, subject to the applicable requirements. (Taxation and Customs Union)
This means procurement teams need to understand not just the product's emissions but also:
Whether and where a carbon price has already been paid.
The threshold was introduced as part of the CBAM simplification effort.
For smaller importers, staying below the threshold can substantially reduce administrative burden.
But companies cannot simply assume that small shipments automatically avoid CBAM.
The relevant question is:
How much covered CBAM material does the importer bring into the EU over the full calendar year?
That requires centralized monitoring across purchasing teams, subsidiaries and customs operations.
A practical solution is to add a CBAM classification into procurement systems.
For every imported chemical or material, companies can track:
Procurement Data | CBAM Relevance |
|---|---|
CN code | Determines whether product is covered |
Product quantity | Determines threshold exposure |
Country of origin | Identifies production location |
Supplier | Links emissions data |
Embedded emissions | Determines carbon obligation |
Carbon price paid abroad | Potential deduction |
CBAM certificate price | Determines financial exposure |
Total landed cost | Enables supplier comparison |
This turns CBAM from a year-end reporting exercise into a continuous procurement-data process.
CBAM creates a closer connection between EU importers and non-EU producers.
The importer has the formal obligation, but much of the information needed for compliance originates at the production facility.
The chain increasingly looks like:
Non-EU producer
↓
Production emissions data
↓
Verification / supporting documentation
↓
EU importer
↓
CBAM declaration
↓
CBAM certificates
This means European chemical buyers will increasingly need suppliers capable of providing reliable emissions data.
Although the definitive phase started in 2026, importers do not immediately surrender certificates for every 2026 shipment.
The European Commission states that the first CBAM declaration, covering 2026 imports, must be submitted by 30 September 2027, with the corresponding certificates surrendered. (Taxation and Customs Union)
This creates an important window for companies to improve their data systems before the first full compliance cycle.
Companies should not interpret the 2027 declaration deadline as meaning that CBAM starts in 2027.
The definitive regime is already operational.
Importers above the applicable threshold need the appropriate authorisation or application reference number to ensure covered goods can be released for free circulation. (Taxation and Customs Union)
The timeline is essentially:
2026
Import + monitor + calculate + collect data
↓
2027
Verify + declare + surrender certificates
This makes 2026 the year in which companies need to build the infrastructure for compliance.
Chemical distributors importing covered products into Europe may be particularly exposed because they aggregate shipments from multiple producers.
A distributor could potentially source:
10 tonnes from Supplier A
15 tonnes from Supplier B
30 tonnes from Supplier C
Individually, the shipments may appear small.
Collectively:
55 tonnes
The annual threshold has therefore been crossed.
Distributors need strong visibility across customers, suppliers and import declarations.
Before CBAM, procurement might rank suppliers primarily on:
Price
Quality
Delivery time
Reliability
A CBAM-exposed chemical could require:
Product price
Carbon intensity
CBAM cost
Quality
Logistics
Reliability
Regulatory data quality
The supplier with the best total delivered economics may not be the supplier with the lowest chemical price.
The long-term policy objective is to reduce carbon leakage by making the carbon cost of imports more comparable to that faced by EU producers. (Taxation and Customs Union)
This creates pressure on carbon-intensive production outside Europe.
For chemical producers, the strategic response could include:
Renewable electricity
Lower-carbon feedstocks
Energy efficiency
Process optimization
Carbon capture
Cleaner hydrogen
Better emissions measurement
Producers able to demonstrate lower embedded emissions could become more attractive to European buyers.
A supplier that can provide high-quality emissions information may eventually have an advantage over an otherwise comparable supplier that cannot.
This creates a new concept:
Carbon-data readiness
Two producers might have similar production costs, but one can provide:
Verified emissions
Installation-level information
Production-process data
Carbon-price documentation
while the other cannot.
The first supplier could be easier for an EU importer to use compliantly.
Identify every imported product by its CN code and confirm whether it falls within the current CBAM scope.
Do not look only at individual purchase orders.
Aggregate covered imports across the calendar year.
Request embedded-emissions information from overseas producers.
The Commission has published corrected definitive-period default values, most recently updated in August 2026. (Taxation and Customs Union)
Calculate the potential carbon cost alongside freight, duty and product price.
CBAM certificate prices are tied to EU ETS prices and are published by the Commission. (Taxation and Customs Union)
Third-country producers and their emissions data increasingly need to support the verification process. The Commission's 2026 guidance includes specific requirements for installation operators and sector-specific guidance for fertilisers and hydrogen. (Taxation and Customs Union)
The 50-tonne threshold may look like a technical compliance detail, but its implications are broader.
It creates a dividing line between:
Small-scale import activity
and
Systematic CBAM exposure.
Once an importer moves above that threshold, carbon becomes part of the economics of sourcing covered goods.
This could encourage European chemical companies to:
Consolidate suppliers → prioritize lower-carbon producers → improve emissions data → redesign sourcing strategies
rather than treating CBAM as a standalone regulatory reporting exercise.
CBAM's definitive phase marks a fundamental change in the way the EU treats carbon-intensive imports. From 1 January 2026, importers exceeding the 50-tonne annual threshold for covered goods must operate within the authorised-declarant framework, while electricity and hydrogen have separate treatment. (Taxation and Customs Union)
For chemical importers, particularly those handling fertilisers and hydrogen, the most important shift is that carbon is becoming part of the landed-cost equation.
The strategic question is no longer simply:
"What is the cheapest chemical we can import?"
It is:
"What is the cheapest compliant chemical after product cost, logistics and embedded carbon are all included?"
As CBAM moves from its first operational year toward the first full declaration and certificate-surrender cycle in 2027, that distinction is likely to become increasingly important for European chemical procurement and global supplier competitiveness. (Taxation and Customs Union)
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