1. Introduction
The European Carbon Border Adjustment Mechanism (CBAM) is one of the cornerstones of the EU's "Fit for 55" package. This includes a series of measures aimed at reducing greenhouse gas emissions by at least 55% by 2030.
With the introduction of CBAM, the EU aims to encourage a more careful approach to CO₂ emissions worldwide, but also to limit any economic disadvantages caused by "CO₂ leakage", i.e. the migration of industries to countries with less stringent regulations on CO₂ emissions.
Specifically, anyone importing emissions-intensive goods into the EU will have to purchase CBAM certificates in future to compensate for the difference between the cost of CO₂ emissions in the country of production and the price of CO₂ certificates in the EU.
There is one important exception: Swiss goods (origin) are exempt from CBAM regulation and therefore from CBAM certificates!
The legal basis was laid down in Regulation (EU) 2023/956. This was clarified on August 17, 2023 with Implementing Regulation (EU) 2023/1773 for the transition phase.2.
2. What is it all about?
Objectives of EU regulation
The EU is pursuing three main objectives with the CBAM:
- Avoiding the relocation of emissions-intensive production to regions with lower climate standards than those of the EU
- Creating a level playing field for EU and third-country companies
- Promoting climate protection in other parts of the world
How CBAM works
- The CBAM sets a "fair" price for CO2 contained in certain goods imported into the EU (see below).
- It ensures that the CO2 price of imports corresponds to the CO2 price of domestic production. Discover our expertise in Governance / ESG.
- Importers register with the national authorities, purchase CBAM certificates and declare the emissions contained in their imports.
- The CBAM will apply in its final form from 2026 and will gradually adapt to the expiry of free certificates under the EU Emissions Trading System (ETS).
Initially, the following goods are affected, including some of their CO2-intensive upstream products and certain downstream goods:
- Aluminum
- Cement
- Electricity
- Fertilizer
- Hydrogen
- Iron and steel
Before the end of the initial transition phase on December 31, 2025, the scope may be extended to other sectors such as organic chemicals and polymers. By 2030, all other product groups currently covered by the ETS are to be added.
3. When does CBAM apply?
Transition phase 1.10.2023 - 31.12.2025
October 1, 2023 heralded the start of the transition phase of the CBAM, which will last until the end of 2025. During this period, affected companies in selected sectors are obliged to submit quarterly reports to the EU Commission. The first was due on January 31, 2024. The quarterly reports include numerous data points and require detailed information on
- Type and quantity of imported goods
- the total actual embedded emissions, including direct and, for some products, indirect emissions, calculated on the basis of defined methodologies
- existing CO2 pricing in the country of origin, including for any upstream materials that are part of the end products
- the location of the facilities where the goods were produced
Implementation phase from 1.1.2026
From January 1, 2026, affected importers must purchase CBAM certificates to offset the emissions embedded in their goods. The following requirements must be met:
- Proof of status as an "approved CBAM declarant" for the authorization to import affected goods
- Calculation of embedded direct and indirect emissions from imported products
- Verification of the declared embedded emissions by an accredited third-party provider
- Purchase and surrender of the required number of CBAM certificates covering the total embedded emissions
- Submission of an annual CBAM declaration by May 31 for emissions from imports from the previous year. The same deadline applies to the submission of CBAM certificates.
4. Enforcement
The customs authorities only permit the import of goods if the declarant is approved by a competent authority at the latest when the goods are released for free circulation (Art. 25 CBAM)
5. Are Swiss goods also affected?
The Federal Council has analyzed the impact of CBAM on Switzerland from an economic, environmental and foreign trade perspective. Due to the regulatory and trade policy risks, the Federal Council 2023 recommended refraining from introducing a CBAM in lockstep with the EU at present. This will give Switzerland a degree of freedom in the medium term, while the EU CBAM and its scope of application are being developed. The need for action can be reviewed in mid-2026 on the basis of the EU's interim assessment available at that time.
However, the Federal Council clearly stated that it wants to adapt Switzerland's ETS in step with the EU so that the EU and Swiss ETSs can remain linked. This is also a prerequisite for Swiss goods to remain exempt from the EU CBAM.
A product is of Swiss origin if it was completely produced or sufficiently processed here.
6. Applicability to Swiss dealers
Conversely, this means that Swiss traders in particular may be affected. The CBAM rules apply to goods not manufactured in Switzerland and affected according to the above list (as defined above) that a Swiss trader wishes to import into the EU.
