For two years the EU Carbon Border Adjustment Mechanism was, in practice, a data exercise. Importers reported the emissions embedded in covered goods; nobody paid. That transitional phase ended on 31 December 2025. Since 1 January 2026 the mechanism has operated in its definitive form, and the difference is not procedural — it is financial. Importers of covered goods are now liable for the carbon embedded in what they bring across the EU border, discharged through the purchase and surrender of CBAM certificates.
For exporters in Africa and the wider Global South, this is the moment the abstraction becomes a line on a buyer's cost sheet. And it reframes the strategic question entirely.
From reporting to pricing
The architecture is set by Regulation (EU) 2023/956, which established CBAM, and the transitional phase ran from October 2023 to the end of 2025 precisely to let the detailed machinery be built through experience. That machinery is now live. The practical timeline that matters to any business in the chain is straightforward:
- Authorised CBAM Declarant status is required to keep importing covered goods above the threshold. Applications filed by 31 March 2026 allow imports to continue while approval is pending.
- Certificate sales on the EU central platform begin on 1 February 2027. Certificates for 2026 imports are bought retroactively in 2027 at the relevant quarterly price.
- The first annual declaration and certificate surrender for 2026 fall due by 30 September 2027.
The obligation, in other words, attaches to goods imported now, even though the cash settlement lands in 2027. That lag is exactly the window in which a well-prepared supplier can turn a buyer's compliance anxiety into a commercial advantage.
The Omnibus recalibration
Before the definitive phase began, the EU softened the edges. Regulation (EU) 2025/2083 — the Omnibus simplification package, in force from 20 October 2025 — replaced the old €150-per-consignment exemption with a single mass-based de minimis threshold of 50 tonnes of covered goods per importer per year. Importers below that line are exempt from authorisation, declarations and certificates. The Commission's own framing is the part worth remembering: the threshold removes roughly 90% of importers from the administrative burden while still capturing about 99% of the embedded emissions.
Two carve-outs matter. Hydrogen and electricity remain in scope regardless of volume. And the relief is administrative, not strategic: the emissions that count are still concentrated in the large flows of steel, aluminium, cement and fertilisers — precisely the goods in which African producers compete.
CBAM does not tax African production. It prices the carbon intensity of what crosses the EU border — and from 2026 that price is real.
Why this lands hardest on the Global South
The mechanism is carbon-intensity-blind to geography but not to grids. Where production draws on a carbon-heavy electricity system, the embedded-emissions figure rises, and with it the certificate cost the EU buyer must absorb or push back up the chain. Producers reliant on fossil-heavy power therefore start at a structural disadvantage against competitors on cleaner grids — irrespective of the quality of the underlying product.
There is, however, a lever written into the regulation itself. Where a carbon price has already been paid in the country of production, the corresponding amount may be deducted from the CBAM certificates due — provided it can be evidenced. That single clause is the most important strategic signal in the entire instrument for resource-exporting states.
The preventive response
This is where the Landmark thesis applies directly: design the compliance instrument to capture value before the cost is imposed, rather than absorbing it after. The deduction for carbon priced at origin means that a domestic carbon-pricing and measurement architecture is no longer only a climate-policy choice — it is a mechanism for keeping revenue at home rather than ceding it to the EU budget. Carbon priced in Nairobi or Johannesburg is carbon not paid for in Brussels.
For the producer, the work is concrete and largely about evidence:
- Build verifiable MRV. Embedded-emissions data must be measured, documented and capable of withstanding verification — not estimated after the fact.
- Establish provenance. Traceable supply-chain data, increasingly anchored in tamper-evident records, turns an emissions claim into an evidentiary asset.
- Resolve the declarant question early. Responsibilities may be delegated to an EU-established representative holding an EORI number, but legal accountability does not transfer — governance over that relationship is essential.
- Prepare for 2028. A Commission proposal of 17 December 2025 would extend CBAM to around 180 downstream steel and aluminium products from 1 January 2028. Today's covered exporters are tomorrow's downstream inputs.
What to do now
The organisations that will fare best are not those that report most diligently but those that treat embedded carbon as priced inventory to be managed. That means an emissions baseline you can defend, a credible path to lowering it, and documentation a sceptical EU buyer — and their auditor — will accept. The certificate cash does not move until 2027. The competitive positioning is decided now.