The world’s first Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase in January 2026, with the European Union reporting the successful implementation of ‘real-time data exchange, efficient validation of declarants, and uninterrupted import procedures at EU external borders’.
This marks an important step in the EU’s attempt to turn climate ambition into a practical tool for cleaner and fairer global supply chains. But CBAM’s long-term success will depend on more than smooth border procedures. At its core lies a more complicated challenge: developing credible systems for verifying carbon emissions at product level across complex international supply chains. This capability remains uneven globally, particularly among exporters in developing economies. As a result, CBAM continues to rely on a fallback mechanism: where actual verified emissions data are unavailable, importers may use default values. Since these values are often conservative, firms unable to substantiate their actual emissions may face a higher CBAM liability than their real carbon footprint would otherwise justify.
Author: Carmen Leong, Junior Researcher
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