Carbon Border Adjustment Mechanism
Supporting UK exporters with carbon assessments and CBAM reporting requirements.
What is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is an EU regulation that applies a levy on products imported into the EU based on the quantity of embedded carbon emissions associated with their production. Introduced in transitional form in October 2023, CBAM entered its definitive phase on the 1st of January 2026.
Its purpose is to prevent carbon leakage - the relocation of carbon-intensive production to countries with less stringent emissions regulations - and to ensure that imports into the EU carry the same carbon cost as goods produced domestically under the EU Emissions Trading System.
Science-Based Targets
Where appropriate, Pro Enviro can help you develop targets aligned with the Science Based Targets initiative (SBTi), providing formal validation of your commitments and giving stakeholders independent confidence in your trajectory.
Key Dates
CBAM transitional period begins. Reporting required, certificates not yet required.
Transitional period ends.
Full CBAM implementation. Purchase of CBAM certificates now required for EU importers.
Annual reporting on embedded emissions. Quarterly certificate purchases for EU importers.
Which sectors does CBAM apply to?
CBAM currently applies to products in six high-carbon sectors, which have been identified as posing the greatest risk of carbon leakage:
The CBAM framework is expected to expand to cover over 50% of carbon emissions from EU ETS sectors over time. UK manufacturers in these sectors who export to the EU should understand their obligations and begin tracking the embedded emissions in their products now.
Understanding embedded emissions
CBAM requires reporting of the carbon emissions embedded in the production of the imported goods. These fall across three categories:
Direct emissions (Scope 1)
Greenhouse gases released directly during the production of the goods, including combustion of fuels in the manufacturing process.
Indirect emissions (Scope 2)
Emissions associated with electricity consumed during production, calculated using the appropriate emissions factor for the electricity supply.
Precursor emissions (partial Scope 3)
Emissions from raw input materials used in production. Detailed precursor data is best practice and required for certain product categories.
How Pro Enviro can help
Whether you are a UK manufacturer exporting goods to the EU and need to understand and document your embedded emissions, or a UK business preparing for the incoming domestic CBAM regime, Pro Enviro can provide the expert support you need.
The CBAM process
Map imported goods to the relevant CBAM aggregated goods category and confirm whether they fall within scope of the regulation.
Quantify direct and indirect emissions using either a calculation-based approach (fuel consumption and emissions factors) or measurement-based approach (direct GHG measurement on site). Precursor emissions must also be accounted for.
Where a carbon price has already been paid in the country of production, this must be documented. This may allow a reduction or removal of the CBAM levy from 2026 onwards.
UK and EU importers must submit annual reports on embedded emissions. EU importers must purchase certificates to cover the carbon cost of their imported goods whereas UK importers will face a direct tax from HMRC. Reports cover a standard calendar year or alternative period of at least three months.
Understand your CBAM obligations
Our consultants will assess your exposure and help you prepare the right documentation and reporting approach.