Your Supplier’s Carbon Is Now Part of Your Landed Cost: 6 Steps to Get CBAM-Ready

For years, calculating landed cost meant adding freight, insurance, duties, taxes and handling charges to the price of the goods.

In 2026, another cost entered the equation: carbon.

On 1 January, the European Union’s Carbon Border Adjustment Mechanism—or CBAM—entered its definitive phase. Importers of certain carbon-intensive goods must now account for the greenhouse-gas emissions embedded in those goods and, where applicable, purchase certificates reflecting those emissions.

This is not simply another sustainability-reporting exercise. It can affect what an import costs, which suppliers remain competitive and whether goods can be cleared through customs.

The European Commission has already published a CBAM certificate price of €75.28 per tonne of CO₂ for the second quarter of 2026. Carbon has become a measurable component of the transaction.

Here are six steps importers—and exporters supplying them—should take now.

1. Establish whether your goods are covered

CBAM currently applies to six sectors:

• Cement

• Iron and steel

• Aluminium

• Fertilisers

• Electricity

• Hydrogen

However, deciding whether an individual product is covered is not as simple as looking at the sector. Coverage is determined using the product’s Combined Nomenclature—or CN—code.

That distinction matters. Two products made from the same material may not necessarily receive the same treatment. Importers therefore need to validate the actual commodity code used on the customs declaration rather than assuming that a product is in or out of scope.

The European Commission provides sector-specific guidance and supporting resources covering the different product categories.

Start by identifying:

• The CN code of every potentially covered product

• Its country of origin

• The volume you expect to import during 2026

• Whether the goods contain covered precursor materials

An incorrect classification can distort not only customs duties but also the carbon cost attached to the transaction.

2. Check whether you exceed the 50-tonne threshold

The original CBAM rules threatened to impose a significant administrative burden on thousands of smaller importers. The legislation was subsequently simplified.

Under the definitive regime, EU importers bringing in more than a single annual threshold of 50 tonnes of covered goods must generally become authorised CBAM declarants. The European Commission explains the threshold and authorisation requirement in its guidance on the definitive CBAM regime.

The exemption removes approximately 90% of importers from the administrative requirements while keeping more than 99% of the emissions originally covered within the mechanism, according to the Council of the European Union.

That is good news for many SMEs—but it introduces another operational requirement: somebody must monitor cumulative imports throughout the year.

A company importing 40 tonnes might initially appear exempt. A later order that pushes the annual total above 50 tonnes could change its position.

Electricity and hydrogen are not covered by this mass-based exemption, so importers of those products should review the rules separately.

3. Confirm who owns the CBAM obligation

CBAM primarily places the compliance obligation on the EU importer or, in certain cases, its indirect customs representative.

This means the parties need to establish responsibility before agreeing the transaction—not after the goods reach the border.

The buyer, seller, customs representative and freight forwarder should be clear about:

• Who will act as the importer of record

• Who will submit the customs declaration

• Who will apply for authorised CBAM declarant status

• Who will collect and verify emissions information

• Who will bear the resulting carbon cost

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The agreed Incoterm® can influence who arranges transportation and import formalities, but it does not automatically solve every CBAM responsibility. The named importer and the customs structure still need to be documented clearly.

The European Commission says importers above the applicable threshold must apply for authorised CBAM declarant status. The CBAM Registry is connected with national customs systems, TARIC and the EU Customs Single Window, allowing customs authorities to validate the declarant as goods enter the EU. The Commission confirmed that this integrated system became operational when CBAM entered into force on 1 January 2026.

This is why CBAM cannot be treated as a year-end finance exercise. It begins with the structure of each import transaction.

4. Get emissions data from suppliers before shipment

The most difficult information may not be held by the importer at all.

The overseas producer must be able to provide information about the emissions generated during production. Depending on the product, this can include direct emissions from the manufacturing process and certain indirect or precursor-related emissions.

That creates a new supplier-management challenge. A competitive price and dependable delivery schedule are no longer enough. The supplier must also be capable of producing accurate, usable and verifiable carbon data.

Importers should ask suppliers:

• Do you know the embedded emissions for this product?

• How were those emissions calculated?

• Which production installation manufactured the goods?

• Has the data been independently verified?

• Has a carbon price already been paid in the country of production?

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Where reliable actual data is unavailable, prescribed default values may have to be used. Those defaults can leave the importer with a higher assumed emissions figure than the producer’s real performance would justify.

The commercial lesson is simple: supplier emissions data should become part of procurement and transaction preparation—not something requested months after delivery.

5. Add carbon to your landed-cost calculation

A purchase price can look attractive until every cost of completing the import is included.

CBAM adds another variable. In simple terms, the exposure is influenced by the embedded emissions in the goods and the price of CBAM certificates. Adjustments may then apply for factors such as a recognised carbon price already paid in the country of production and the gradual removal of free allowances under the EU Emissions Trading System.

Consider a purely illustrative shipment with 200 tonnes of reportable embedded emissions. At the official Q2 2026 certificate price of €75.28, the gross reference value would be €15,056 before any applicable deductions or adjustments.

That amount could be large enough to change:

• The profitability of the order

• The preferred supplier

• The selling price

• The quantity purchased

• The market in which the goods are sourced

In 2026, the Commission calculates CBAM certificate prices quarterly. From 2027, prices will be calculated weekly, increasing the need to account for carbon-price movement when quoting or approving transactions.

Importers should therefore treat CBAM exposure as an estimated landed-cost component from the moment the trade is being negotiated.

6. Build an auditable transaction record

CBAM brings together information that is often scattered across emails, spreadsheets, supplier portals, customs records and separate compliance systems.

A complete transaction record may need to connect:

• The purchase order and commercial invoice

• CN codes and country of origin

• Quantities and shipment dates

• Producer and installation details

• Embedded-emissions calculations

• Verification evidence

• Carbon prices paid outside the EU

• Customs declarations and CBAM records

The first annual CBAM declaration covering 2026 imports is due in 2027. Waiting until then to reconstruct dozens—or hundreds—of transactions would create unnecessary risk.

The better approach is to collect the relevant information as each transaction is created, negotiated, shipped and completed.

CBAM is now part of the trade—not separate from it

CBAM illustrates a broader change in international commerce. A cross-border transaction is no longer defined only by product, price, quantity, delivery and payment. Regulatory and environmental data are becoming part of the commercial agreement itself.

For importers, the immediate priority is to determine exposure, assign responsibility and calculate the potential cost before committing to an order.

For exporters selling into the EU, the message is equally clear: the ability to provide reliable emissions information can influence whether your products remain competitive.

iTradeDigital helps buyers and sellers create, negotiate and document cross-border transactions through one guided digital workflow. By connecting transaction terms, responsibilities, costs, milestones and supporting documents, both parties can work from the same record—from initial agreement through delivery and payment.

Because carbon is no longer just a sustainability issue.

It is part of the landed cost.