Sofia Araújo Alves authors the article “When carbon crosses borders: the European CBAM and regulatory consolidation”

Sofia Araújo Alves, an associate in the Tax team, is the author of the article “When carbon crosses borders: the European CBAM and regulatory consolidation”, published in International Tax Review (ITR), in which she analyses the transition of the Carbon Border Adjustment Mechanism (CBAM) to its definitive phase, in force since 1 January 2026, and its regulatory and operational impacts on importers operating in the European Union market.

In the article, the Morais Leitão associate explains that the CBAM, established by Regulation (EU) 2023/956, aims to address carbon price disparities between imported goods and goods produced within the European Union, promoting a level playing field and contributing to climate neutrality. The mechanism applies, in particular, to products with significant greenhouse gas emissions, such as cement, iron, steel, aluminium and electricity.

Sofia Araújo Alves highlights that, following a transitional period focused primarily on reporting obligations, the move to the definitive phase entails a substantial strengthening of compliance requirements. These include obtaining authorised CBAM declarant status, submitting an annual declaration with information on imported quantities and verified embedded emissions, surrendering the corresponding CBAM certificates on an annual basis, and periodically maintaining a minimum level of certificates. Failure to comply with these obligations may result in financial penalties and import restrictions.

The article also addresses the amendments introduced by Regulation (EU) 2025/2083, which sought to simplify the regime, notably through an exemption applicable to importers whose annual volume of covered goods does not exceed 50 tonnes, with the exception of the electricity and hydrogen sectors. Despite these measures, the author draws attention to the continuing uncertainty surrounding the practical implementation of the CBAM across Member States, warning of the risks of import disruptions and penalties for operators unable to comply in a timely manner with the new regulatory requirements.

Read the full article here.