The European Commission has clarified how the definitive Carbon Border Adjustment Mechanism (CBAM) applies to goods held as inventories before the regime began. Items manufactured before the CBAM regime started may still fall within scope if they enter EU free circulation during 2026. The Commission’s updated CBAM Questions and Answers states that the decisive factor is the customs release date, not the production date or the date of the sales contract.
The clarification is aimed at importers holding pre-2026 inventories of steel, aluminium, fertilisers and cement. It also covers cases where goods were produced in 2025 but imported into the EU in 2026. Under the guidance, CBAM applicability turns on acceptance by an EU customs authority of the customs declaration releasing the goods for free circulation.
Customs release as the trigger for CBAM applicability
The Commission’s guidance addresses inventories accumulated before the definitive CBAM regime entered into force on 1 January 2026. It says that manufacturing, purchasing, or signing a sales contract before that date does not automatically exempt goods later released into EU free circulation during the definitive regime. The relevant event is tied to customs processing rather than earlier commercial or production milestones.
Importers with goods stored in warehouses, ports, consignment stocks or other inventory locations are directed to assess exposure through customs movements. The Commission’s clarification indicates that production records or procurement dates alone are not sufficient for determining whether CBAM applies. It also notes that economic ownership, invoicing and physical production timing can differ from the customs event governing CBAM scope.
This distinction is particularly relevant for trading companies and distributors where goods remain in storage for several months before import clearance. In such situations, the timing of when goods are released for free circulation becomes central to compliance assessment. The Commission’s approach links eligibility to customs acceptance of the declaration rather than internal supply-chain timelines.
2026 reporting period for embedded emissions from earlier production
The Commission has set a specific rule for embedded emissions reporting for goods imported during 2026. Embedded emissions must be determined using the legally prescribed 2026 reporting period even when the goods were physically manufactured earlier. The Commission says this method is intended to reduce administrative burden connected with proving actual production year for each imported item.
At the same time, emissions data relating to production before 1 January 2026 cannot be submitted as actual verified production-year emissions for these imports. The Commission explains that no CBAM verification regime or accredited CBAM verifiers were available for those earlier production periods. As a result, importers must follow a framework aligned with the 2026 reporting period.
Verified emissions versus default values for pre-2026 inventories
The Commission’s guidance indicates that pre-2026 inventories do not automatically require assessment using default values. Where appropriate actual verified emissions are available for the relevant installation and goods within the required 2026 reporting period, those values can be used in the CBAM declaration. This allows reliance on verified datasets when they correspond to the legally required reporting timeframe.
If acceptable verified emissions corresponding to the required reporting period are unavailable, importers must apply applicable default values. The Commission notes that this distinction can have financial consequences for companies importing older stocks. For instance, an importer bringing steel produced in late 2025 into EU free circulation during 2026 cannot use historical 2025 mill emissions as verified CBAM actual values for that shipment.
The guidance also highlights potential uncertainty where producers have ceased operations, changed production technology, modified their energy mix, or cannot provide an appropriate verified dataset covering 2026 reporting requirements. In such cases, importers may face reliance on default values rather than installation-specific verified figures aligned with 2026.
Commercial contracts concluded before CBAM may still trigger liabilities
The customs-timing rule also affects commercial agreements concluded before the definitive regime began. An EU buyer that purchased materials in 2025 may still face a CBAM liability when those goods are released into free circulation in 2026. This reflects that liability depends on customs release timing rather than purchase timing.
The Commission notes that contracts negotiated before the regime started may not clearly specify whether carbon costs fall on the exporter, an intermediary trader or the EU importer. Disputes could arise where prices were fixed without a carbon-cost adjustment but customs release occurs after 1 January 2026. Importers are therefore expected to assess exposure at shipment and customs-entry level.
The guidance further indicates that contractual provisions should address allocation of carbon-related costs. This requirement is linked to differences between commercial arrangements and customs acceptance timing under which CBAM applies to imports released during 2026.
Recordkeeping and trade-flow implications for neighbouring suppliers
The clarification reinforces recordkeeping needs for suppliers in Serbia, Türkiye, Ukraine and other neighbouring markets. Importers are directed to maintain records connecting production, sales, inventory movements and customs declarations so that customs release events can be traced accurately. The Commission also states that pre-2026 production does not provide a general exemption from CBAM.
Goods manufactured or exported before the definitive regime began may still fall within scope if they remained outside EU free circulation until 2026. The distinction is also relevant when interpreting trade flows: increased production or exports in late 2025 cannot automatically be treated as front-loading ahead of CBAM if goods were not released into EU free circulation before applicability begins.
For importers, the Commission’s guidance ties applicability to the customs release event and requires a specific approach to embedded-emissions reporting for 2026 imports, regardless of when goods were physically produced. This framework applies even when inventory originated from earlier production periods.