From Transitional to Definitive: A New Chapter
Throughout the CBAM transitional period that began on October 1, 2023, EU importers were only required to report their embedded emissions. No financial payment was involved during that phase; the goal was to build data collection capacity and prepare the market. As of January 1, 2026, the definitive phase has officially begun, and reporting alone is no longer sufficient (Regulation 2023/956, Article 36).
With the definitive phase, importers must purchase CBAM certificates corresponding to the embedded emissions of their imported goods. This marks the moment when the European Union's policy to prevent carbon leakage moves from monitoring to enforcement.
The Certificate Purchasing Mechanism
How Pricing Is Determined
CBAM certificates are directly linked to the EU Emissions Trading System (EU ETS) allowance price. Each certificate's price is calculated as the average of the EU ETS auction closing prices for the relevant week (Regulation 2023/956, Article 21). At the end of 2025, EU ETS prices were trading in the range of EUR 60-75 per tonne (ICE Endex data, 2025).
Each CBAM certificate represents one tonne of CO2 equivalent embedded emissions. Importers, as authorized CBAM declarants, will purchase certificates through platforms designated by EU member states.
Surrender Obligations
Authorized declarants must surrender, by May 31 each year, a number of certificates covering the embedded emissions of goods imported during the previous calendar year. Additionally, at the end of each quarter, declarants must hold a certificate balance covering at least 80 percent of cumulative imports up to that point (Regulation 2023/956, Article 22).
Deduction of Carbon Prices Paid in Country of Origin
A critical detail: if a carbon price has already been paid in the country where the imported product was manufactured, that amount can be deducted from the CBAM certificate obligation. Once Turkey's TR-ETS system becomes operational, this deduction mechanism will be highly significant for Turkish exporters (Regulation 2023/956, Article 9).
Verification Requirements Tighten
While default values and estimates were broadly acceptable during the transitional period, the definitive phase makes verified installation-level emissions data mandatory. Independent verifiers accredited by the European Commission will audit embedded emissions calculations (European Commission, CBAM Implementing Regulation 2023/1773).
This is a change that directly affects data quality across your supply chain. Manufacturers exporting to the EU need to significantly strengthen their MRV (Monitoring, Reporting, Verification) capabilities.
Transitional vs. Definitive Phase: Key Differences
| Parameter | Transitional Period (2023-2025) | Definitive Phase (2026+) |
|---|---|---|
| Financial obligation | None | Certificate purchase mandatory |
| Data source | Default values accepted | Verified installation data required |
| Verification | Optional | Accredited verifier mandatory |
| Reporting frequency | Quarterly | Annual surrender + quarterly balance |
| Carbon price deduction | Not applicable | Origin country carbon price deducted |
The Financial Impact
Consider a concrete example: a manufacturer exporting 100,000 tonnes of steel annually from Turkey to the EU. Assuming an average embedded emissions intensity of 1.8 tCO2 per tonne of steel, the total obligation is 180,000 tCO2. In a scenario where the EU ETS price is EUR 70 per tonne, the annual certificate cost reaches EUR 12.6 million.
These figures make clear that CBAM has moved well beyond a reporting exercise and has become a strategic business risk.
What to Do Now
With the definitive phase underway, the necessary steps are clear:
- Strengthen your emissions data infrastructure: Installation-level MRV systems are no longer a luxury but a requirement.
- Integrate into financial planning: Build certificate costs into your budget cycle.
- Initiate your verification process: Begin working with an accredited verifier immediately.
- Monitor carbon price deduction opportunities: Assess how national mechanisms like TR-ETS will affect your CBAM obligation.
Bottom line: January 1, 2026 is the date when the carbon border levy moved from theory to practice. For companies that prepared, this is a manageable cost factor; for those that did not, it is a risk that directly impacts competitiveness.
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