The minute
- CBAM has been in its definitive phase since 1 January 2026, covering steel, aluminium, cement, fertilisers, hydrogen and electricity
- The obligation to buy CBAM certificates starts in February 2027, covering 2026 imports; importers below 50 tonnes a year are exempt
- A carbon price already paid in the country of origin (such as Brazil’s SBCE) can be deducted from the CBAM amount
Why it matters: For anyone exporting steel, aluminium or fertiliser to Europe, CBAM is already a real cost, and participating in a domestic carbon market stopped being just local compliance, it became a direct discount on the European bill.
What CBAM is and why it exists
The Carbon Border Adjustment Mechanism charges for the carbon embedded in products imported into the EU, to prevent European companies from losing competitiveness against producers in countries without a carbon price, and to encourage decarbonization outside the bloc.
Sectors and timeline
Steel, aluminium, cement, fertilisers, hydrogen and electricity have been in the definitive phase since January 2026. The obligation to buy certificates only starts in February 2027, retroactively covering 2026 imports.
How the SBCE connects to CBAM
A carbon price already paid in the country of origin can be deducted from the amount owed under CBAM. That makes Brazil’s SBCE directly relevant to anyone exporting steel, aluminium or fertiliser to Europe.
Who’s exempt
Importers below 50 tonnes a year of the covered products are exempt from the obligation.
Frequently asked questions
Does CBAM affect a company that only sells domestically?
Not directly, it only affects whoever exports the covered products to the EU.
What is “embedded carbon”?
The amount of CO2 emitted to produce the good, calculated under CBAM’s own methodology.
Does paying into a domestic carbon market reduce what I owe under CBAM?
Yes, a carbon price already paid at home can be deducted from the amount charged on the European import.
Read next: what CBAM is, in a quick definition.
Read next: what the SBCE is.