New legislative acts and proposals regarding Carbon Border Adjustment Mechanism (CBAM)

With the current newsletter we present you with latest developments regarding the Carbon Border Adjustment Mechanism (CBAM).

1. In a nutshell

In December 2025 the European Commission published several new legislative acts on CBAM, as well as drafts of legislative acts of importance for Bulgarian importers of goods under the Mechanism.

1. New CBAM legislative acts

New legislative acts (regulations) and changes to existing acts concern topics such as:

• calculation methodology, establishing rules for calculation of embedded emissions (direct and indirect), precursors, usage of actual or default values as well as requirements for monitoring and reporting of emissions
• rules for calculating free allocation adjustment of CBAM certificates, including use of actual/default values, treatment of complex goods, provisions for electricity
• provision of CBAM-relevant import information including data on EORI, Combined Nomenclature (CN) codes, quantities, origin, customs procedures, and related documents
• default values for embedded emissions in imported goods and electricity, including mark-ups for estimates to be phased-in gradually
• methodology for calculating prices of CBAM certificates, ensuring alignment with EU ETS allowance prices
• principles and conditions for verification of declared embedded emissions under CBAM, including rules on physical and virtual site visits, risk-based assessment, materiality thresholds, standardized electronic verification reports
• authorization of declarants and conditions for obtaining, maintaining, and revoking authorized CBAM declarant status
• rules on the CBAM registry, including access, registration, and interoperability for authorized CBAM declarants, applicants, operators, verifiers, independent persons, and customs authorities
• data management and interoperability for declarants, operators, verifiers, customs authorities.

   III.            Other CBAM drafts and documents

In addition, the European Commission has presented a proposal to prevent circumvention of CBAM rules, as well as for extension of the scope of goods under the Mechanism to certain downstream products. Proposed extended scope includes goods under dozens of new CN codes such as steel products (e.g. pipes and fasteners), alloys/composites and metal components, machinery and equipment, certain vehicles and parts.

The European Commission (EC) has also published a Report on the implementation of the CBAM, as well as a proposal to establish a Temporary Decarbonization Fund.

We note that all importers under the CBAM mechanism shall be registered as authorized declarants by January 2026, with registration applications allowed by exception until 31 March 2026.

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Our team remains available to assist you in analyzing the new requirements by:

• Advice on necessary steps and preparation for collecting documentation for meeting CBAM obligations
• Assessment of your internal processes, control measures and procedures for CBAM compliance
• Review and analysis of your current and future obligations in light of the latest published acts and draft amendments.
• Assistance in relation to the process of registration as an authorized declarant
• Assistance with calculations of carbon emissions and optimizing potential future obligations under carbon certificates.