The European Union’s Carbon Border Adjustment Mechanism (CBAM) enters its definitive regime on January 1 2026, moving from quarterly reports to a pay-to-comply model tied to the European Union Emissions Trading System (EU ETS). The United Kingdom’s version follows from 1 January 2027 with its own rate-setting logic. As a result, supply chains face a structural shift in how imported carbon is priced, verified and reported. Organisations in carbon-intensive industries like manufacturing, construction and mining must consider CBAM implementation in supply chain operations as part of their strategy to determine cost competitiveness and market access over the next decade.
| 1. Why CBAM Matters Now | 2. The Role of CBAM in Supply Chain Management |
| 3. Preparing Your Supply Chain for CBAM Implementation | 4. Download the CBAM Guide |
CBAM, in simple terms, places a price on carbon (GHG emissions) for certain imports so that these goods face a similar carbon cost to products made domestically under carbon pricing schemes, such as the EU Emissions Trading System (EU ETS). EU CBAM is currently in its transition phase (2023 – 2025) and is moving to the definitive phase from 2026, requiring the purchase of CBAM certificates; UK CBAM will start on January 1, 2027. These policies aim to prevent carbon leakage and create a level playing field. In practice, they will reshape sourcing, supplier engagement and cost models across multiple tiers of the value chain.
For metals alone, the impact is material; recent analysis suggests iron and steel importers could account for roughly 75% of early CBAM costs. In other words, they will carry the bulk of the initial burden, which is consistent with CBAM’s design, since its initial scope targets the most carbon-intensive commodities.
Learn More: CBAM Explained | Tunley Environmental
The main goal of the CBAM is to equalise the carbon price between imported goods and domestic production. In the EU, the definitive regime requires importers (or their indirect representatives) to register as authorised CBAM declarants, report embedded emissions annually and surrender certificates each year. Certificates are valued against the weekly average EU ETS price (€/tCO₂e).
During the transitional phase (October 2023 to December 2025), the focus has been on CBAM reporting each quarter, with flexibility on methods and use of default values narrowing over time. The scope began with cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. When fully phased, CBAM is intended to capture more than half of emissions in ETS-covered sectors, with a review of potential downstream products coverage by 2030. For supply chains, this means that they will need reliable emissions data from specific facilities, clean product-code mapping to the customs nomenclature, and an operating rhythm that links procurement, logistics, customs and finance.
How CBAM Affects the Supply Chain
Sourcing and Supplier Development
Procurement must shift from vague "sustainability" terms towards specific emissions data requirements for each supplier, along with the right to audit the data if required. Beyond meeting CBAM reporting requirements, it also gives you an edge in negotiations when you compare suppliers' embedded emissions and their expected correction costs.
Planning, Inventory and Working Capital
CBAM adds a new part to landed-cost projections that can change based on carbon markets in the EU or policy changes in the UK. Planners will need to keep adjustment possibilities in mind throughout the whole sales and operations planning period.
Training Custom Brokers and Representatives
Customs brokers and indirect representatives must know everything there is to know about CBAM product codes, registry workflows and liability situations in order to do their jobs. Where supply chain management previously split logistics execution and commercial liability, CBAM effectively re-bundles them as errors in HS code classification or origin documentation can have cost impacts beyond duty rates, spilling into certificate requirements or UK charges.
Enhancing Quality Assurance and Audit Trails
Once full implementation begins in 2026, supply chains should expect greater scrutiny of emission calculation methods, verification statements and reconciliation to customs entries. Internal audit and assurance functions will need to see not only the calculation workbooks, but the supplier attestations, verification reports and, where relevant, evidence of deductible overseas carbon prices (UK). Where defaults are used, the reason must be documented because defaults may be costlier and could signal a supplier performance gap.
Manage Procurement Data
Many organisations underestimate how complex collecting procurement data can be, especially when tested against regulatory requirements. To enhance CBAM implementation in supply chain, it’s advised that organisations have a consistent internal directory that contains all relevant information on suppliers and their procurement policies. Procurement analytics teams can speed up this task by translating spending data into CBAM-mapped inventories and automatically creating files that meet EU requirements for submissions.
Arrange Internal Management System
Ahead of full implementation, align your supply chain processes to the quarterly-rate environment, prepare evidence for any overseas carbon price deductions and plan cash-flow for the first annual payment falling after the 2027 accounting period.
Set Up Your Authorised Declarant
Applications for authorised CBAM declarants opened in March 2025 using the using the Registry's Authorisation Management Module. This personnel will oversee preparing calculations, reviewing supplier evidence, signing declarations and submitting certificates.
This guide breaks down the complexity of the CBAM regulation, whether you're an importer, producer or supply chain manager, this is your essential starting point to prepare for the EU’s carbon pricing frontier. It includes a readiness checklist to help you find out how prepared you are for CBAM reporting.
Download for free: CBAM Guide | Tunley Environmental
As the EU explores CBAM scope extension to downstream products before 2030, early movers will be in the best position to win on carbon cost policies. Framed correctly, organisations can view CBAM implementation in supply chain as a redesign of procurement economics and supplier collaboration. The decisions taken now will influence the cost base, service risk and market access profile for your company’s procurement strategy and supplier management over the next decade.