The CBAM — Carbon Border Adjustment Mechanism — is the European Union's new instrument to combat so-called 'carbon leakage', i.e. the risk that companies relocate production to countries with less stringent environmental regulations to avoid CO₂ emission costs.
After the transitional phase that began in October 2023, the mechanism became fully operational on 1 January 2026. From this date, EU importers must purchase CBAM certificates corresponding to the carbon content embedded in imported products.
The sectors involved are: steel and iron, aluminium, cement, fertilisers, hydrogen and electricity. For each tonne of CO₂ equivalent embedded in imported goods, the importer will have to bear a cost equal to the average price of EU ETS allowances.
For Swiss companies exporting to the EU, the implications are significant. Although Switzerland has its own emissions trading system (ETS), Swiss exporters will need to precisely document the emissions embedded in their products to enable their EU customers to obtain any deductions.