What is CBAM and how does it interact with invoicing obligations?
CBAM (Carbon Border Adjustment Mechanism) is the EU's mechanism for pricing the carbon content of imported goods from non-EU countries. From 2026, CBAM requires EU importers of covered goods (steel, cement, aluminum, fertilizers, electricity, hydrogen) to declare embedded carbon content and surrender CBAM certificates. Invoices for CBAM-covered goods must reference CBAM compliance data where applicable.
How does CBAM affect invoicing for imported goods?
CBAM invoicing implications: (1) CBAM-covered goods invoices must include or reference embedded carbon content data (provided by the exporter); (2) EU importers must include CBAM declarations in their customs submissions; (3) The CBAM registry stores authorized declarant status and certificate purchases; (4) Invoices for covered goods may need to reference the embedded emissions per tonne of product; (5) Supplier questionnaires and carbon content certifications become part of the procurement and invoicing documentation chain.
Frequently Asked Questions
- Which goods are covered by CBAM?
- CBAM initially covers: steel and iron (including downstream products), aluminum, cement, fertilizers, electricity, and hydrogen. The European Commission intends to expand coverage to additional sectors over time. Coverage is determined by the Combined Nomenclature (CN) code of the goods. Importers should verify CN codes for their goods against the CBAM regulation annexes to determine whether CBAM obligations apply.
- What is the CBAM transitional period?
- The CBAM transitional period ran from October 2023 to December 2025. During this period, importers had only reporting obligations (quarterly reporting of embedded carbon content and carbon prices paid in origin countries) with no certificate purchase obligations. From 1 January 2026, full CBAM applies: importers must purchase and surrender CBAM certificates proportional to the embedded carbon in their imports.