CBAM Hard Launch: What EU Importers Must Do Now That Default Values Are Gone

European Union’s Carbon Border Adjustment Mechanism (CBAM)

Introduction

The European Union’s Carbon Border Adjustment Mechanism (CBAM) completed its transition from educational phase to full enforcement at midnight on 31 October 2025. Importers of steel, cement, aluminum, fertilizers, hydrogen and electricity must now submit quarterly reports derived exclusively from actual, installation-level embedded-carbon data. The concessionary default emission factors that simplified life since October 2024 have been withdrawn. This article explains the operational implications and sets out a pragmatic roadmap for maintaining uninterrupted market access.

1. Legal backdrop

   
   

   Regulation (EU) 2023/956, as amended by Implementing Regulation 2023/1773, empowers the Commission to reject any CBAM report that relies on proxy values once the transitional registry is fully operational. National Competent Authorities (NCAs) may impose financial penalties up to 4 % of an undertaking’s Union turnover and, in egregious cases, suspend customs authorisations. The first “hard” reporting deadline is 30 January 2026 for Q4 2025 data.

   
   

2. Technical requirements in force

   -Data granularity: direct and indirect emissions expressed as tonnes CO₂e per tonne of product, disaggregated by production route and fuel mix.

   
   

   -Verification standard: ISO 14064-3 or equivalent, performed by an EU-accredited verifier or a mutually recognised third-country body.

   
   

   -File format: CBAM XML schema v2.1 uploaded through the EU Transitional Registry; digital signature and two-factor authentication are compulsory.

   
   

   -Retention obligation: supporting evidence must be stored for four full fiscal years and produced on request within 30 calendar days.

   
   

3. Emerging supply-chain challenges

   
   

   a) Information asymmetry: Many non-EU producers continue to issue generic environmental product declarations (EPDs) that do not isolate CBAM-relevant emissions. Bridging this gap frequently requires on-site data collection and heat-level mass balance exercises.

   
   

b) Verifier capacity constraints: The European Co-operation for Accreditation (EA) lists fewer than 140 verifiers competent for CBAM scopes. Lead times for overseas missions already extend into Q2 2026.

c) ERP system limitations: Legacy material-resource-planning platforms rarely capture carbon attributes at the heat-number or batch level, complicating automated report generation.

4. Recommended compliance workflow

   
   

   Step 1: Product scoping: Cross-reference customs nomenclature (CN) codes against the official CBAM list to establish full exposure.

   
   

Step 2: Supplier capability audit: Distribute Commission-approved data-request templates and score respondents on data completeness, granularity and existing verification.

Step 3: Verification Scheduling: Block verifier calendars for the entire calendar year; prioritise high-volume or high-emission-intensity installations.

Step 4: Data normalisation: Translate supplier datasets into the EU’s “corrected emission factor” methodology, accounting for relevant losses and allocational rules.

Step 5: Internal governance: Insert four-eye review and digital sign-off checkpoints; maintain audit trails that satisfy both customs authorities and financial auditors.

Step 6: Continuous monitoring: Track regulatory updates, carbon price forecasts, and verifier availability to recalibrate the compliance programme quarterly.

5. Penalties and risk matrix

   
   

   -Late submission: €100–€500 per day (member-state specific).

   -Incorrect or incomplete report: administrative fine starting at €15 000 plus potential claw-back of avoided carbon costs.

   - Systematic non-compliance: suspension of AEO status and mandatory CBAM certificate purchases from 2026 onward, effectively doubling cost exposure.

   
   

6. Strategic considerations beyond compliance

   Importers that integrate verified carbon data into procurement tenders can:

   
   

   a. Differentiate themselves in downstream markets demanding low-carbon material;

   b. Negotiate longer-term contracts indexed to EU-ETS price signals;

   c. Prepare early for anticipated sectoral expansion (chemicals, pulp & paper) currently under EU review.

   
   

7. How SLV 360 supports your transition

   
   

   Our interdisciplinary team combines carbon accountants, former customs officials and accredited verifiers to deliver:

   a. Gap analysis against EU methodology within 10 working days;

   b. Verified MRV programmes in 18 jurisdictions;

   c. API-level integration of emission factors into SAP, Oracle and Microsoft Dynamics;

   d. End-to-end quarterly report preparation and portal upload;

   e. Training workshops with CPD certification for sustainability, procurement and finance staff.

Closing remarks

The expiry of default values marks a structural inflection point for EU trade. Organisations that institutionalise robust carbon-data pipelines today will convert compliance expenditure into competitive advantage tomorrow. Conversely, those who defer action risk financial penalties, supply-chain disruption and inflated liability once CBAM certificates become payable in 2026.

Contact SLV 360 at info@spheralink360.com for a complimentary CBAM exposure assessment and a fixed-fee implementation proposal tailored to your import portfolio.