If you import goods into the EU, you’ve likely heard of the Carbon Border Adjustment Mechanism (CBAM). It’s the EU’s policy for putting a carbon cost on certain imported products, making sure foreign producers face similar climate costs to EU manufacturers.

The goal is to stop carbon leakage: when production shifts abroad to avoid EU emissions rules, and keep competition fair. 

CBAM reporting is already mandatory with quarterly reporting applying from 1 October 2023 until 31 December 2025. From 1 January 2026, reporting continues on an annual basis and imports from 2026 onwards create CBAM cost exposure that must be covered by CBAM certificates.

This guide breaks down which sectors and products are currently covered, with clear examples to help you assess if your imports are in scope, and what to do next.

CBAM scope: Which sectors and products are covered?

The EU’s priority is to target sectors with the highest risk of carbon leakage. These are industries that generate huge amounts of emissions and face tough international competition. 

For now, CBAM zooms in on six main sectors:

• Iron and steel
• Cement
• Aluminium
• Fertilisers
• Electricity
• Hydrogen

It also includes some precursor materials and processed products linked to these sectors.

The official CBAM rules use Combined Nomenclature (CN) codes to define exactly which products fall under each category. While CN codes are essential for reporting, at a high level, the scope is based on the type of material or product and its typical emissions intensity.

If you import goods from any of these sectors, even if only occasionally, it’s important to assess whether they meet the CBAM criteria for reporting.

For more information on timelines and reporting requirements, see our CBAM timeline, deadlines, and phases guide.

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Sector breakdown: What’s in scope today?

As we’ve learnt, CBAM currently covers six sectors that are responsible for high levels of industrial emissions. Here’s what’s included in each sector in more detail:

Iron & Steel

This is one of the broadest categories. Covered products include agglomerated ores, pig iron, crude steel, and a wide range of finished and semi-finished products (bars, rods, rails, wires, tubes, plates, tanks, drums, bolts, nuts, etc.).

Most ferro-alloys are excluded except ferro-manganese, ferro-chromium, and ferro-nickel. Scrap and remelted steel are also excluded.

Emissions profile: Significant emissions from both energy use and chemical reduction processes.

Find everything you need to know about importing iron and steel here.

Cement

CBAM covers a range of cement products, including cement clinkers, white Portland cement, other Portland cements, aluminous cements, hydraulic cements, and some kaolinitic clays.

Emissions profile: Cement production is highly carbon-intensive due to both fuel combustion and the chemical process of calcination.

Find everything you need to know about importing cement here.

Aluminium

Unwrought aluminium, powders, flakes, and a variety of processed aluminium products are included (rods, wires, plates, sheets, structures, containers, etc.).

Certain alloys outside the listed product codes may be exempt.

Emissions profile: High indirect emissions from electricity use, especially in primary aluminium production.

Find everything you need to know about importing aluminium here.

Fertilisers

CBAM applies to several fertilisers and raw materials, including nitric acid, sulphuric acid, ammonia (both anhydrous and aqueous), nitrates of potassium, and mixed fertilisers containing nitrogen, phosphorus, and potassium.

Emissions profile: Mainly from the chemical processes and high energy use in manufacturing.

Find everything you need to know about importing fertilisers here.

Electricity

Electricity imported from non-EU countries. Emissions are calculated based on the carbon intensity of production in the exporting country.

Emissions profile: Varies widely depending on energy sources (coal, gas, renewables, etc.).

Find everything you need to know about importing electricity here.

Hydrogen

All hydrogen imports are included.

Emissions profile: Hydrogen’s emissions vary widely depending on production method, ranging from high (grey) to near-zero (green).

Find everything you need to know about importing hydrogen here.

Keep in mind: This list may expand in 2026. 

The European Commission is considering adding other high-emission goods like certain chemicals, polymers, and more products involving indirect emissions.

How to check if your imports are in scope

If you import goods into the EU, checking whether they fall under CBAM is essential for planning your reporting and future certificate costs. 

Here’s how to confirm if your imports are covered:

1. Map your goods to CN codes

Start by identifying the CN codes for your imported products. These are the official product classification codes used in EU customs. CBAM applies to specific CN codes listed in Annex I of the regulation.

2. Check the country of origin and production method

Goods imported from EU Emissions Trading Scheme-linked countries (like Norway, Iceland, Liechtenstein, and Switzerland) are exempt. For other countries, you’ll also need to assess the production method, especially for emissions-heavy processes.

3. Cross-reference with CBAM scope documentation

Compare your product’s CN code and characteristics against the official CBAM guidance and scope documentation. The EU also offers a self-assessment tool to help importers determine if their goods are in scope. Keep in mind that product scope may expand in the coming years, so ongoing checks are essential.

4. Coordinate across teams

Mapping CBAM exposure isn’t just a compliance task. Sustainability, procurement, and trade compliance teams need to work together to verify supplier emissions data, CN codes, and production details.

Are there any exemptions?

CBAM includes a limited number of exemptions designed to reduce administrative burden for specific trade flows. The following exemptions apply:

• Low-value consignments under €150 are exempt from reporting.
• Returned goods (re-imported without modification) are excluded.
• Outward processing goods brought back under customs procedure are not covered.

In addition, a 50-tonne per year de minimis threshold applies to imports of: iron and steel, aluminium, cement and fertilisers. Importers whose total annual net mass of these goods remains below the threshold are exempt from CBAM obligations for those products. Electricity and hydrogen are not subject to this mass-based threshold.

Real-world examples: What CBAM challenges might look like

Every importer’s CBAM journey will look a little different depending on product mix and supplier readiness. The examples below illustrate challenges mid-market companies may encounter as requirements tighten.

Example 1: A mid-sized aluminium importer moving away from default values

Now that the definitive phase has started (imports from January 2026 onwards create cost exposure), they prioritise collecting supplier-specific emissions data aligned with the EU methodology. Procurement launches a structured data request across suppliers, but a few overseas producers can’t provide complete data. The importer has to choose between arranging third-party support for data collection, switching to suppliers who can provide compliant data, or accepting more expensive default-based reporting and higher long-term exposure.

Example 2: A steel components buyer standardising supplier data ahead of annual reporting

A manufacturer sources steel components from a network of smaller suppliers across multiple CN codes. As they shift from quarterly to annual reporting for 2026 imports, they realise supplier emissions data is inconsistent in format, boundary definitions, and supporting evidence. To reduce compliance risk and avoid last-minute corrections, they centralise supplier data collection in one system, apply validation checks, and flag gaps early so suppliers can fix issues well before verification and annual declaration deadlines.

Example 3: A fertiliser distributor forecasting certificate costs for 2026 imports

This fertiliser distributor has several suppliers still unfamiliar with the CBAM and the EU methodology. They send suppliers EU calculation templates and explain that indirect (electricity-related) emissions must also be reported, not just direct emissions. They can then use the collected data to forecast CBAM certificate needs and budget scenarios through the free allocation phase-out period.

Calculate your company's expected CBAM costs below:

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The key is acting now to reduce reliance on default values, close supplier data gaps, and build a defensible cost forecast for 2026 imports and beyond.

CBAM scope in 2026: What importers need to know

As of January 2026, CBAM applies to imports of iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. Coverage is defined by Combined Nomenclature (CN) codes, including certain precursor materials and selected downstream products.

Looking ahead, the European Commission is expected to continue reviewing CBAM and assessing whether additional carbon-intensive products could be brought into scope in later phases. While no expansion has been adopted as of January 2026, sectors such as certain chemicals or polymers have been discussed at a policy level. Any future expansion would require new legislation and advance notice.

For a clear breakdown of what to expect in each phase, plus key deadlines and what companies should focus on now, refer to our CBAM timeline article.

Next steps for importers

Now that CBAM has entered its definitive phase, the priority is to move from quarterly reporting to a robust annual process and reduce cost exposure from 2026 imports.

Work with procurement to secure supplier-specific emissions data (EU methodology, verification-ready), and use it to estimate certificate exposure for your 2026 imports. For further information on how the certificate system works, read our step-by-step guide.

Coolset helps mid-market importers simplify emissions data collection, stay compliant with CBAM rules, and plan ahead for certificate costs. Talk to us today to get started.