Skip to main content
October 12th
Search
Search ONESOURCE Global Trade Help and Support.

This article applies to:

  • Product: ONESOURCE Global Trade

EU CBAM enters its enforcement era — US takes next steps in response

Date of publication: October 12, 2026

Overview

The EU's Carbon Border Adjustment Mechanism (CBAM) moved to full implementation on January 1, 2026. Importers of iron and steel, aluminum, cement, fertilizers, hydrogen and electricity now accrue a real financial liability on every covered shipment. CBAM requires EU importers of covered products into the EU to pay the difference between the carbon price paid in the country of production and the price of carbon allowances under the EU's Emissions Trading System (ETS). The EU is now considering proposals to expand coverage as of January 1, 2028, to hundreds of additional products.
On October 8, 2026, the U.S. Trade Representative (USTR) opened a comment docket (91 FR 64450, USTR-2026-0661) on CBAM's effect on U.S. trade — including the pointed question of "whether and what enforcement action may be appropriate." The comment period closes November 9, 2026.

Key elements

  • Obligations are currently implemented; only payment is deferred. Liability accrues on every covered import from January 1, 2026, at the published price for that quarter. Certificates cannot be purchased until February 1, 2027, and the 2026 declaration and surrender are due September 30, 2027. The deferral changed the timing of the payment, not the size of the bill.
  • Prices are published and rising. The Commission set Q3 2026 certificates at €82.32/tCO₂e, up from €75.36 (Q1) and €75.28 (Q2). The 2026 exposure is already quantifiable.
  • No money leaves the business in 2026. Certificates cannot be bought at all — the central platform doesn't open until February 1, 2027. Under the original 2023 regulation, purchases would have started January 1, 2026; the Omnibus amendment pushed the start date back by thirteen months.
  • A 50-tonne annual exemption. Regulation (EU) 2025/2083 replaced the old €150-per-consignment rule with a cumulative 50-tonne mass threshold per importer, removing roughly 90% of importers while retaining about 99% of emissions. It does not apply to hydrogen or electricity and crossing it mid-year pulls the entire year into scope.
  • Data quality drives cost. Supplier-specific emissions require verification by an accredited verifier; EU default values carry a deliberate mark-up. USTR calls that mark-up "punitive."
  • The scope is expanding. A pending proposal would extend CBAM to downstream steel- and aluminum-intensive goods from January 1, 2028. The Commission proposed roughly 180 products; per USTR, the Council's position adds over 300 and Parliament's approximately 400. Trilogue negotiations will settle the final list.

Why it matters

CBAM is no longer only a compliance exercise — it is a trade dispute. A WTO panel was established on September 25, 2026, to hear Russia's challenge (DS639), with 25 members, including the United States, reserving third-party rights. Nothing about that proceeding suspends a company's obligations. Meanwhile, EU producers still receive 97.5% of their free ETS allocation in 2026, phasing to zero by 2034 — the asymmetry at the heart of both the WTO claim and Washington's concern. With USTR already running a Section 301 excess-capacity investigation covering the EU, the CBAM docket sits in a live enforcement environment.

Next steps for trade professionals

  • Screen your CN/HS codes against current Annex I and against all three downstream proposals.
  • Confirm authorized declarant status for every EU importing entity and audit 2026 emissions records now — not in mid-2027.
  • Model 2026 liability at published quarterly prices and allocate CBAM cost contractually with suppliers and customers.
  • File comments by November 9th if CBAM affects your business. Business confidential submissions are permitted with a public version.

Conclusion

The compliance clock runs on EU law, not on trade politics. Build the data trail for 2026, prepare for 2028 scope, and use the USTR docket while it is open.
This article is for general informational purposes and does not constitute legal advice. Companies should consult trade counsel regarding the specific implications for their operations.
For more information on how ONESOURCE Global Trade solutions can assist you in managing supply chain risk, tariff challenges, and regulatory compliance, please contact your Account Manager or Customer Success Manager.