A data, compliance, and cost management guide for companies
As of 1 January 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) has moved beyond the reporting phase and entered a regime that creates direct financial obligations. CBAM aims to apply a carbon price equivalent to the EU Emissions Trading System (EU ETS) to the import of certain products into the EU.
Scope and implementation timeline
CBAM covers the iron and steel, aluminium, cement, fertilisers, electricity, and hydrogen sectors. Products are defined based on CN/HS (Combined Nomenclature) codes, and certain downstream products as well as specific inputs are also included within the scope.
- 1 October 2023 – 31 December 2025: Transitional period (no financial obligation, reporting required).
- 1 January 2026: Definitive phase began (reporting plus CBAM certificate obligation).
The European Commission will assess expanding the scope after the transitional period and aligning it with the EU Emissions Trading System in the medium term.
What changed in 2026?
In the definitive phase, imports can only be carried out by authorised CBAM declarants. The embedded emissions of imported products are converted into a financial obligation through the surrender of CBAM certificates.
Emissions calculation: not only production, electricity is now a cost item
CBAM does not only limit emissions to gases released from factory stacks, but the European Commission’s approach goes beyond facility-level production emissions and, under certain conditions, also includes electricity and inputs. Within this framework, under CBAM:
- Direct emissions (Scope 1) constitute the core obligation.
All greenhouse gas emissions arising from the production process at the facility where the CBAM good is produced are directly included in the cost calculation.
- Indirect emissions from electricity (Scope 2) apply for certain products.
The carbon intensity of electricity consumed in production is added to embedded emissions in accordance with the methodology defined by the Commission. This turns energy efficiency and the carbon content of electricity sources into a factor of commercial competitiveness.
- If CBAM-covered inputs are used (partial Scope 3), the embedded emissions of those inputs are also taken into account.
Especially for “complex goods,” emissions data from supplied intermediate products directly affect the final product’s carbon cost.
The real risk: data, evidence, and verifiability
The main challenge in CBAM compliance is not the regulation itself, but the measurement methodology, data collection from suppliers, evidence documentation, and verification readiness. Missing or inaccurate data leads to:
- Higher costs,
- Compliance and delay risks,
- Loss of commercial trust.
Draft Turkish ETS Regulation and the impact of CBAM
The Draft Regulation on the Turkish Emissions Trading System (ETS) demonstrates that the data discipline demanded by CBAM is no longer limited to EU trade, but is becoming a mandatory structural requirement at the national level in Türkiye.
By integrating Monitoring, Reporting and Verification (MRV) processes with ETS implementation into a single regulatory framework, the draft explicitly defines its objective as establishing the rules and procedures for the monitoring, reporting, and verification of greenhouse gas emissions, as well as for the operation of the ETS (Articles 1–2). The regulation extends ETS coverage to Category B and C installations (Article 5), introducing obligations such as obtaining greenhouse gas emissions permits and conducting all applications through electronic systems (Articles 6–8). It further stipulates that the emissions cap will be set on an emissions-intensity basis (Article 11), that free allocation will be designed using a benchmark and sub-installation approach, and that operators will be required to submit detailed, product- and process-level documentation, including a Monitoring Plan, Monitoring Methodology Plan, and an annual Activity Level Report (Article 13; Annexes 4–5). Reporting deadlines are fixed at 30 April (Article 29), third-party verification is mandatory (Article 30), and the enforcement framework is explicitly linked to the Climate Law (Article 35). The draft also introduces a pilot phase for 2026–2027, signalling a gradual and managed transition to full implementation (Provisional Article 1).
This framework shows that the accurate, traceable, and verifiable emissions data systems established for CBAM compliance can serve directly as a foundational infrastructure for future obligations under the Turkish ETS, including permitting, reporting, allocation, and surrender requirements. Companies that invest in building this infrastructure today will be best positioned to secure a lasting competitive advantage.
CBAM certificates, pricing logic, and reporting obligations
Under CBAM, importers fulfil their obligations by purchasing CBAM certificates from national competent authorities. The surrender of one CBAM certificate for each tonne of CO₂ equivalent embedded emissions is required. Certificate prices are indexed to EU Emissions Trading System (EU ETS) carbon prices.
- In 2026, pricing will be based on the quarterly average auction price of EU ETS allowances.
- From 2027 onwards, weekly average pricing will apply.
Uncertainty in emissions data leads to unpredictable and, in many cases, higher costs. The core components of CBAM reporting include:
- Quantity of imported goods (MWh for electricity, tonnes for other products),
- Country of origin and producer installation information,
- Product-level embedded emissions intensity (tCO₂e/tonne),
- Indirect emissions from electricity, where applicable,
- Net carbon cost calculated after accounting for carbon prices paid in the country of origin.
The European Commission audits CBAM reports and may impose administrative penalties ranging from €10 to €50 per tonne of unreported emissions in cases of missing or incorrect reporting; penalties may increase for repeated infringements. Under CBAM, certificate pricing, reporting quality, and the accuracy of emissions data are inseparable; without reliable data, there is no reliable cost.
Who is affected? Authorisation thresholds and the de minimis rule
EU importers or indirect customs representatives importing CBAM-covered goods into the EU above a single-shipment mass threshold of 50 tonnes are required to apply for authorised CBAM declarant status.
In addition, the only applicable de minimis exemption under CBAM is a €150 value threshold per consignment. For CBAM-covered imports exceeding this threshold, CBAM obligations apply regardless of quantity. Therefore, companies must assess more than whether a product falls under CBAM; importer status, customs role (direct importer or indirect representative), shipment structure, and the ability to obtain emissions data from the supply chain must all be evaluated together.
How can you accelerate CBAM readiness with CGE?
CBAM is not merely a reporting exercise; it is a matter of corporate governance, processes, and data maturity. CGE’s evidence-based assessment approach makes CBAM preparation measurable and manageable:
- Gap analysis: Where are you today, and which areas require improvement for 2026 compliance?
- Benchmarking and trend tracking: Monitor progress over time and assess improvement momentum.
- Secure and anonymised data environment: A safe operational framework for sensitive data.
- Rapid reporting and action planning: Reduce preparation time and focus on execution.
- CBAM data management: Securely manage and store product carbon footprints and all CBAM-relevant data over time within CGE’s infrastructure.
- Single-source compliance management: Measure, report product carbon footprints and prepare CBAM reports through one integrated system.
Companies that achieve CBAM compliance do not merely mitigate risk; they also enhance their credibility with EU customers and financial institutions.
Contact us: Let us assess your CBAM readiness, build your action plan, measure and report your product carbon footprint, prepare your CBAM declaration through the system, and manage your emissions data end to end.
Oğuz ER / Sustainability Specialist Assistant