From emission reporting to measuring your carbon tax exposure

Starting in 2026, the European Union will introduce the world’s first carbon tax on both local production and imported goods. Globally, this move aims to make CO2 emissions a significant cost factor for firms and indirectly encourages the adoption of international carbon pricing by other countries. To promote fair competition under the WTO and address the lack of emissions data from imports, the EU has implemented the Carbon Border Adjustment Mechanism (CBAM). This ensures equal taxation on both domestic and imported goods, protecting EU industries and preventing factory relocations to countries like China – carbon leakage.

 

Under CBAM, EU companies must adjust their customs data to include the carbon footprint of both raw and semi-finished imported materials. This requirement forces global suppliers to adhere to official emission calculation standards, currently set by the EU.

 

Iron, steel, aluminium, cement, fertilisers, hydrogen and electricity producers, distributors, and traders worldwide will need a new set of tools to comply with CBAM and the upcoming carbon tax. They must remain compliant in both reporting to authorities and emission measurement, while seeking green premiums to remain competitive.