The European Union is moving forward with its Carbon Border Adjustment Mechanism (CBAM), set to enter its definitive phase in 2026. Recent regulations have clarified the process for importers to become authorized CBAM declarants, a mandatory status from January 1, 2026, for bringing goods like cement, steel, aluminum, and fertilizers into the EU. The price of CBAM certificates will be linked to the weekly average auction price of EU Emissions Trading System (ETS) allowances. To ease the transition, the EU has introduced simplifications, including a de minimis threshold for small importers. This landmark policy aims to prevent "carbon leakage" by ensuring that imported goods face a carbon price equivalent to that of domestic producers, thereby encouraging cleaner industrial production globally. The transitional phase, which began in October 2023, requires importers to report on the embedded emissions of their products without a financial levy.