From 1 January 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) has entered its definitive phase, turning what was previously a reporting exercise into a real compliance and cost issue for Irish Businesses importing certain goods from outside the EU. While CBAM is aimed at preventing carbon leakage and supporting EU climate goals, it has very real implications for small and medium‑sized Irish Businesses involved in importing materials from third countries.
What Is CBAM and Why Does It Matter?
CBAM is designed to ensure that certain carbon‑intensive goods imported into the EU face a carbon cost equivalent to that paid by EU producers under the EU Emissions Trading System (ETS). The aim is to prevent production shifting to countries with weaker climate rules and to encourage cleaner global supply chains.
CBAM applies to imports from outside the EU of the following goods:
- Iron and steel
- Aluminium
- Cement
- Fertilisers
- Hydrogen
- Electricity
These goods are defined by specific customs (CN) codes, meaning some businesses may be affected without realising it, particularly where CBAM goods are embedded in wider supply chains.
Why CBAM Is Relevant to Small Irish Businesses
CBAM is not just for large multinationals. Many Irish SMEs are affected because they:
- Import steel, aluminium or fertilisers for Construction, manufacturing or agri‑business
- Source finished or semi‑finished materials from the UK, Asia, or other non‑EU countries
- Act as the importer of record, even where goods are ordered through agents or distributors
Importantly, size does not matter — what matters is what you import and how much.
The 50 Tonne Exemption — A Key Relief for SMEs
To reduce the administrative burden on smaller importers, the EU introduced a de minimis exemption:
- If your total annual imports of CBAM goods are 50 tonnes or less, you are fully exempt from CBAM authorisation, reporting and certificate obligations
- This exemption does not apply to electricity or hydrogen, which remain in scope regardless of volume
- If the 50‑tonne threshold is exceeded at any point during the year, all imports for that year become subject to CBAM.
This exemption removes CBAM obligations for around 90% of importers, while still capturing the vast majority of embedded emissions.
What Changes in 2026?
From 1 January 2026, CBAM becomes financially binding:
- Importers above the 50‑tonne threshold must become Authorised CBAM Declarants
- Embedded emissions must be calculated and tracked
- CBAM certificates will be required for emissions linked to 2026 imports (to be purchased and surrendered in 2027)
- Importers must submit annual CBAM declarations rather than quarterly reports.
Failure to comply can result in customs blocks on imports, penalties and loss of market access.
What Small Irish Importers Need to Do Now
1. Identify Whether You Import CBAM Goods
Review your customs data and supplier invoices to determine whether you import goods covered by CBAM and check the CN codes used.
2. Check the 50‑Tonne Threshold
Calculate your expected 2026 import volumes for CBAM goods. If there is any risk of exceeding the threshold, early action is critical.
3. Apply for Authorised CBAM Declarant Status (If Required)
If you expect to exceed 50 tonnes:
- You must apply via the CBAM Registry / Authorisation Management Module
- Applications should be made before the threshold is exceeded, and no later than 31 March 2026.
4. Engage with Non‑EU Suppliers
Importers are responsible for emissions data. You may need to:
- Request actual emissions data from suppliers, or
- Use default values published by the European Commission (often more costly).
5. Plan for the Cost Impact
CBAM certificates will be priced in line with the EU ETS carbon price. While certificates are not purchased until 2027, 2026 imports create the liability, so budgeting and pricing decisions should be reviewed now.
Key Takeaway for Irish SMEs
CBAM in 2026 is not a theoretical future rule — it is now live and will directly affect many Irish importers. While the 50‑tonne exemption provides welcome relief for smaller businesses, those near the threshold or importing electricity or hydrogen need to act quickly. Assessment, supplier engagement and registration where required will avoid disruption, penalties and unexpected costs later.