What is CBAM?
The Carbon Border Adjustment Mechanism (CBAM — Regulation (EU) 2023/956) is the EU’s carbon-pricing mechanism for imports of carbon-intensive products. CBAM applies a carbon cost on imported goods equivalent to the cost EU producers pay under the EU Emissions Trading System (EU ETS), preventing “carbon leakage” (production migration to lower-carbon-cost jurisdictions). Transitional period began 1 October 2023; full financial obligations from 1 January 2026.
CBAM scope
- Initial sectors: cement, iron and steel, aluminium, fertilisers, electricity, hydrogen.
- Expansion under review: potential addition of organic chemicals, polymers and refined petroleum products.
- Downstream products: certain semi-finished and finished products containing covered materials.
How CBAM works
- Transitional phase (Oct 2023 – Dec 2025): quarterly reporting of embedded emissions; no financial obligation.
- Definitive phase (from Jan 2026): importers (“authorised CBAM declarants”) purchase CBAM certificates corresponding to embedded emissions, at the weekly EU ETS price minus deductions for carbon costs already paid in origin country.
- Verification: embedded emissions data must be verified by accredited verifiers.
CBAM compliance mechanics
The operative burden of the carbon border adjustment is data logistics: EU importers must report embedded emissions of in-scope goods (iron and steel, aluminium, cement, fertilisers, hydrogen, electricity) and, as the definitive regime phases in, surrender CBAM certificates priced against the EU ETS. For Turkish exporters in these sectors the exposure is commercial before it is legal — EU customers demand verified emissions data and will price uncertainty against suppliers who cannot provide it. The practical workstream: installation-level emissions measurement aligned to CBAM methodology, verification arrangements, contract clauses allocating data obligations and certificate costs in supply agreements, and monitoring Türkiye’s own carbon-pricing developments, since a domestic ETS changes the offset arithmetic at the border.