Carbon Border Adjustment Mechanism (CBAM)
The European Union’s mechanism that charges imports of iron and steel, aluminium, cement, fertilisers, hydrogen and electricity for the carbon emissions embedded in their production, at a price linked to the EU ETS. The 2023–2025 transitional phase required reporting only; from 2026 authorised declarants must buy CBAM certificates. Suppliers selling these products into the EU now need verified installation-level emissions data to stay competitive.
Related terms
Carbon footprint (product carbon footprint and Scopes 1-2-3) PCF
The total greenhouse-gas emissions caused by a product over its life cycle – usually from raw-material extraction to the factory gate (“cradle-to-gate”) – expressed in kg CO₂e and calculated under ISO 14067 and the GHG Protocol. At company level, Scope 1 covers direct emissions, Scope 2 purchased energy and Scope 3 the supply chain; most of a manufacturer’s Scope 3 comes from the raw materials it buys. That is why CBAM, CSRD reporting and brand targets now drive buyers to ask raw-material suppliers for verified product carbon footprints (PCF) and EPDs.
Import duty (customs tariff)
A tax charged on imported goods on their customs value, according to the HS code and country of origin. It is usually a percentage of value (ad valorem), sometimes an amount per quantity (e.g. EUR per tonne). The rate can change with the general WTO rate (MFN), free trade agreements (zero or reduced rates), additional duties or anti-dumping measures. In landed-cost calculations it is computed on the CIF value including freight and insurance and is then added to the VAT base.
Explained in the trade handbook
More in Customs, tax & compliance
- Anti-dumping and countervailing duty (AD)
- Bonded warehouse
- Certificate of origin and preferential origin proofs (EUR.1, A.TR, Form A) (C/O)
- Commercial invoice
- Customs broker
- Customs valuation (transaction value)
- Dual-use goods and export controls
- Export declaration
- HS code (Harmonized System)
- Inward processing relief (IPR)
- Know your customer / know your business (KYC / KYB)
- Packing list (P/L)