Introduction to CBAM 2026: transition to Definitive Regime with December 17, 2025 Decisions

Introduction to CBAM 2026: 17 December 2025 Decisions The European Commission published on 17 December 2025 a critical package of secondary legislation for the 2026 "financial obligation" period, broadening the scope, clarifying technical modalities and financial obligations ahead of the transition to the implementation period of CBAM. Of the total 24 documents, 14 are binding secondary legislation (CBAM final regime), 2 are transitional assessment reports, and 8 are legislative proposals for scope and funding. the 14 binding regulations form the basis of the CBAM law that will enter into force from 2026. Details are below. december 17, 2025 Summary of New CBAM Developments 1. Scope Expansion (Downstream): CBAM, which has so far only covered basic materials such as steel, aluminum, fertilizer, etc., has included ~180 downstream products (machines, white goods, auto parts, screws, nuts, etc.) in the impact assessment scenario. Although taxation of these products will start in 2028, registration and tracking processes have been brought forward. 2. Start of the Financial Period: as of January 1, 2026, in addition to the reporting obligation, the financial obligation (certificate purchase) period will begin. First payments will be made in early 2027. 3. Anti-circumvention: Tough measures and a new inspection mechanism have been introduced against the exclusion of products by changing HS codes or slight modifications. 4. Simplification and "De Minimis" Threshold: In order to reduce the burden on importers, an exemption (de minimis) has been introduced for imports under 50 tons of weight on an annual basis. 5. Verification and Accreditation: The obligation for third country auditors to obtain approval from EU accreditation bodies for verification of emission reports has been detailed. Amending Regulation to 2023/956 (Proposal) Draft Regulation (Proposal) Covers 180 steel and aluminum-intensive sub-products (machinery, vehicles, household appliances). 2028 implementation target. Implementing Act on Methodology for Emissions Calculation Final / Published Sets precise technical rules on how manufacturers in third countries calculate embedded emissions. Restricts the use of default values. Implementing Act on Free Allocation Adjustment Final/Published Explains how free carbon allowances received by producers in the EU will be deducted from the cost to importers (offsetting). Verification and Accreditation Regulation Final (Delegated/Implementing) Sets out who can audit emissions reports and the ISO-based standards that these auditors must meet. CBAM Certificate Pricing Regulation Final / Published Sets out how the CBAM certificate price will be calculated and announced based on weekly average ETS prices. CBAM Review Report Final (Report) Official report including analysis of the transition period (2023-2025) and plans for future expansion (chemicals, etc.). Footnote: Final: Adopted by the Commission and in the process of OJ publication. Supply Chain Risk and the Real Data Imperative Supply Chain Risk: If your company imports products containing steel or aluminum, such as machine parts or white goods, the luxury of saying "My product is not on the list" is over. although 2028 is the implementation date, you must start collecting emissions data from today. Every day that passes will make it harder for your supply chain to comply with CBAM. Therefore, there are serious risks in assuming that your products are out of scope. Real Data Obligation: The European Commission has made it very clear that it will keep default values punitively high. If you are unable to obtain real emissions data from your suppliers, you will have to pay more tax than your competitors. This will both increase your costs and weaken your competitiveness. Data transparency and accuracy in your supply chain is therefore critical under CBAM. Comment: From 2026 onwards, the cost of CBAM will be based directly on the triangle of measurement, verification and certification. In short, accurate measurement of emissions, reliable verification of these measurements and certificates will be the main determinants of the cost. Turkish producers who fall into the default value will be exposed to the most expensive scenario in practice. That is, producers unable to provide real emissions data will face additional costs calculated on the basis of the Commission's high default values. In the medium term, the downstream product proposal will directly affect sectors such as automotive, machinery and white goods. Firms operating in these sectors will face the requirement to collect and verify emissions data at every stage of the supply chain. Details A) Binding Secondary Legislation - Definitive Regime (2026+) Directly mandatory in practice (Implementing / Delegated Acts) # Document name Type Legal status What does it bring? 1 IA on calculation methodology Implementing Act Final - adopted Methodology for calculation of embedded emissions after 2026 (Scope 1-2, system boundaries, product-based approach) 2 Annex to IA on calculation methodology Annex Final Technical tables, formulas for the methodology, sector annexes 3 IA on free allocation adjustment Implementing Act Final How to reduce the CBAM certificate obligation with EU ETS free allocation 4 Annex to IA on free allocation adjustment Annex Final Calculation parameters for free allocation adjustment 5 IA on customs communication Implementing Act Final Customs-CBAM Data flow between registry and importer 6 IA on default values Implementing Act Final Default emission values to be applied if no actual emissions 7 Annex to IA on default values Annex Final Product/sector based default value tables 8 IA on price of CBAM certificates Implementing Act Final Certificate price: EU ETS auction price (2026 quarterly, 2027+ weekly) 9 IA on verification principles Implementing Act Final How to conduct CBAM verification (risk-based approach) 10 Annex to IA on verification principles Annex Final Formats for verification, minimum controls 11 IA on authorisation of declarants Implementing Act (amending) Final Authorized CBAM Declarant application and authorization process 12 IA on the CBAM registry Implementing Act (amending) Final CBAM Registry & Operator Portal functioning 13 DA on accreditation and verification Delegated Act Final Accreditation regime for verifiers 14 Annex to DA on accreditation and verification Annex Final Detailed technical requirements for accreditation B) Implementation Assessment (Not legislation, but very critical) # Document Type Status Purpose 15 Review Report on the application of CBAM Regulation Commission Report Final Formal assessment of the transition period 2023-2025 16 Annex to Review Report Annex Final Data sets, statistics, country/product analyses C) New Legislative Proposal - Scope Expansion (Not yet binding) # Document Type Legal status What does it mean? 17 Proposal amending Reg. 2023/956 (downstream goods + anti-circumvention) COM Proposal Extension of CBAM to semi-finished & finished products 18 SWD Impact Assessment - part 1 SWD Support document Economic & sectoral impact analysis 19 SWD Impact Assessment - part 2 SWD Support document Detailed scenarios 20 Annexes to the Proposal Annex Support document Product lists, assumptions 21 SWD Executive Summary SWD Support document Summary of impact analysis 22 SWD accompanying document SWD Support document Legal & technical background D) New Fund Mechanism - Temporary Decarbonization Fund # Document Type Status What does it bring? 23 Proposal establishing the Temporary Decarbonisation Fund COM Proposal Draft Directing CBAM revenues to decarbonization investments 24 Annex to the Fund Proposal Annex Support document Scope and principles of use of the Fund