Carbon border adjustment in the European market: a readiness assessment framework for businesses

Purpose and scope of the study

The European Union's Carbon Border Adjustment Mechanism (CBAM) provides for a price to be applied, when certain carbon-intensive products enter the European market, to the emissions generated during their production. Although the financial obligation lies with the importer in Europe, the emissions data used to calculate the obligation comes largely from the producer. The mechanism therefore creates new responsibilities in data, verification and cost management for businesses supplying products to the European market.

The aim of this study is to summarise the basic functioning of the mechanism on the basis of European Commission documents and to set out a framework that businesses can use to assess their level of readiness. Its scope covers not only producers that export directly in the product groups subject to the mechanism, but also businesses that supply inputs to these producers. The study does not offer a legal opinion or a business-specific cost calculation; it defines the questions to be answered and the assessment dimensions in the preparation process.

How the mechanism works

According to the European Commission's questions and answers document, the mechanism was applied with a reporting obligation only during the transitional period from October 2023 to December 2025, and moved on 1 January 2026 to the definitive period, which involves a financial obligation. In the definitive period, the mechanism applies to imports of certain products in the cement, iron and steel, aluminium, fertiliser, electricity and hydrogen sectors. Importers below a single annual mass threshold of 50 tonnes for products other than hydrogen and electricity are exempt from the authorisation requirement. The main elements of the obligation can be summarised as follows:

• Declaration and surrender: Authorised declarants submit the first annual declaration for 2026 imports, and surrender the corresponding certificates, by 30 September 2027.
• Sale of certificates: The sale of certificates through the common central platform begins on 1 February 2027; from 2027, in each quarter, certificates corresponding to at least 50% of the embedded emissions in goods imported since the beginning of the year must be held.
• Price: For 2026, the certificate price is calculated as the quarterly average of auction prices in the European emissions trading system; the Commission has announced a first-quarter price of EUR 75.36 per tonne and a second-quarter price of EUR 75.28. From 2027, the price is set on the basis of a weekly average.
• Deduction: If it is proven that a carbon price was paid during the production of the goods, the amount paid can be deducted from the obligation.
• Default values: Where verified actual emissions data is not available, the default values used carry a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028 onwards; for the fertiliser sector, this rate is 1%.

According to Commission documents, the gradual phasing out of free emission allowances granted to producers in Europe over the 2026-2034 period is balanced by a corresponding increase in the obligation under the mechanism over the same period. The impact of the mechanism on product costs should therefore be assessed not over a single year but over this period as a whole.

Developments as of September 2026

On 14 August 2026, the European Commission published ten guidance documents to support operators of installations outside the European Union in complying with the requirements of the definitive period. Four of the documents cover general topics such as the general concepts of the mechanism and the compliance cycle, implementation steps for operators of installations outside the Union, the calculation of embedded emissions and the free allocation adjustment methodology; the other six address production processes and monitoring approaches specific to the cement, hydrogen, fertiliser, iron and steel, aluminium and electricity sectors. On 24 August 2026, the Commission also published guidance on verification and accreditation for verifiers and national accreditation bodies.

In Türkiye, the Medium-Term Programme (2027-2029), published on 6 September 2026, envisages supporting the green transformation and export competitiveness of emission-intensive sectors by strengthening the alignment of the Türkiye Emissions Trading System with the Carbon Border Adjustment Mechanism. The programme also includes continuing work on secondary legislation for the implementation of the Climate Law, and putting into practice sectoral transformation steps for production and trade in order to increase competitiveness in export markets, above all the European Union.

What changes for producers?

Because the obligation under the mechanism lies with the importer, producers may regard themselves as not directly affected. However, the amount the importer bears depends on the emissions data provided by the producer and on whether that data has been verified. Where verified actual data cannot be provided, the use of default values with a mark-up may increase the total cost of the product in the European market. This may make producers able to provide emissions data reliably a more attractive choice for buyers.

The impact is not limited to direct exporters. Since the emissions of precursor inputs used in production are also taken into account for products covered by the mechanism, businesses supplying these inputs may also be asked for emissions information. Businesses that use covered products as inputs may also begin to take their suppliers' emissions performance into account in purchasing decisions.

Readiness assessment dimensions

The framework addresses a business's level of readiness in five dimensions. The key question to be answered for each dimension is set out below:

• Scope: Do the business's products, or the inputs it supplies to its customers, fall within the product groups covered by the mechanism, and what information do buyers in the European market request?
• Measurement: Are energy and fuel consumption, process emissions and emissions information on purchased inputs recorded regularly at installation level?
• Verification: Is emissions data supported by documents suitable for review by a verifier and by an internal control system?
• Cost and reduction: Are embedded emissions per product and the possible cost impact taken into account in pricing and investment decisions, and have energy efficiency and low-carbon energy options been assessed?
• Customer communication: Has it been defined in what form, how often and under whose responsibility data will be provided to buyers?

Each dimension is assessed at four levels: awareness, basic records, systematic measurement and verified management. The result of the assessment is presented as a profile showing the levels of the dimensions together. For example, in a business that remains at the basic records level in the measurement dimension but receives frequent data requests from its customers, the priority is to establish a measurement system at installation level.

Priority steps and relationship to the programmes

The assessment profile forms the basis of a business-specific action list. Steps that can be prioritised in the preparation process include:

• Listing the products covered by the mechanism and the related customer requests
• Appointing a person responsible for emissions data at installation level and putting the measurement method in writing
• Comparing the sector guidance published by the Commission on 14 August 2026 with the relevant production processes
• Requesting emissions information from input suppliers
• Assessing energy efficiency and emission reduction options together with their cost impact

This study has been prepared for use in the sector studies of the Research and Strategy Directorate and the Business Community and International Trade Directorate. Businesses wishing to maintain their presence in the European market or to enter it are linked to the International Market Access and Business Development Programme, and businesses with a pronounced need for measurement and energy efficiency to the Digital Transformation and Productivity Programme. Shared questions at sector level are addressed in the Applied Research and Workshop Programme with the participation of the business community, universities and public institutions. The framework is updated periodically in line with new Commission documents and regulations in Türkiye.

Sources

• European Commission — Carbon Border Adjustment Mechanism (CBAM) Questions and Answers (last updated 27 May 2026) — taxation-customs.ec.europa.eu
• European Commission — CBAM definitive regime — taxation-customs.ec.europa.eu
• European Commission — Price of CBAM certificates (first-quarter price 7 April 2026, second-quarter price 6 July 2026) — taxation-customs.ec.europa.eu
• European Commission — Guidance documents to support CBAM implementation in the definitive period (14 August 2026) — taxation-customs.ec.europa.eu
• European Commission — Guidance on CBAM verification and accreditation (24 August 2026) — taxation-customs.ec.europa.eu
• Presidency of Strategy and Budget — Medium-Term Programme (2027-2029) (6 September 2026) — sbb.gov.tr