Carbon Border Adjustment Mechanism

Statute European Union

The Carbon Border Adjustment Mechanism prices the carbon embedded in imported goods so that EU producers under the emissions trading system are not undercut by imports from jurisdictions without one. Importers report embedded emissions per consignment and, in the definitive regime, surrender certificates to match.

• Embedded emissions per good - The reportable quantity is emissions attributable to production, which has to come from the producer, often outside the EU.
• Sectoral scope - Cement, iron and steel, aluminium, fertilisers, electricity and hydrogen at the outset.
• CBAM Registry - Reports are filed into an EU-operated registry rather than exchanged between companies.
• Transitional then definitive - A reporting-only phase preceding the certificate-surrender regime.

CBAM belongs beside EUDR as the second regime pushing supply chain data into a state system rather than between companies. Both require data that only an upstream producer holds, both make an EU importer accountable for obtaining it, and neither specifies how the two should exchange it. The State of Supply Chain APIs identifies this as the shape to watch: the government becomes the API provider, the industry becomes a competent client, and the trading-partner interfaces that would make the underlying data flow are still nobody’s obligation.