CBAM has entered its definitive phase

The end of the adjustment period

As of January 1, 2026, the Carbon Border Adjustment Mechanism (CBAM), the EU mechanism for adjusting the carbon price at the border, has moved from the transitional period into its definitive phase. What exactly has changed, and how do these changes affect Serbian manufacturers exporting to the European Union?

Unlike the transitional period (October 2023 to December 2025), when EU importers only had to report embedded emissions, from January 1, 2026 financial settlement through the purchase of CBAM certificates becomes mandatory. This is no longer just an administrative obligation; it now becomes a real cost that directly affects the competitiveness of products on the EU market.

What is CBAM and why was it introduced?

CBAM is part of the EU strategy for reducing greenhouse gas emissions and fighting “carbon leakage”: situations where companies move production to countries with laxer environmental standards, or where EU products are replaced by more carbon-intensive imported products.

The mechanism works by applying to certain imported products a carbon price that corresponds to the costs EU producers would bear under the EU Emissions Trading System (EU ETS).

Which products does CBAM cover?

CBAM applies to the following emission-intensive sectors:

Cement and cement clinker
Iron and steel (including semi-finished and finished products)
Aluminium (primary and secondary)
Fertilizers (ammonia, nitric acid, urea, etc.)
Hydrogen
Electricity

It is important to note that the Commission plans to extend the scope of CBAM to roughly 180 additional products from January 1, 2028, including steel and aluminium products, machinery and equipment, and vehicles.

The transitional period (2023-2025): what was learned?

During the transitional period (October 1, 2023 to December 31, 2025), importers had an obligation of quarterly reporting on embedded emissions, but without financial obligations. The period served for adjustment and data collection.

Key changes during the transitional period:

Until December 31, 2024: EU method, equivalent method or default values
From January 1, 2025: Only the EU method for calculating emissions
From July 1, 2025: Mandatory use of actual emissions; default values are no longer allowed

The last quarterly report, for Q4 2025, must be submitted by January 31, 2026.

What has changed since January 1, 2026?

1. Mandatory purchase of CBAM certificates

The key change: instead of only reporting, EU importers now have to:

Buy CBAM certificates corresponding to the emissions embedded in imported products
Surrender the certificates to the competent authorities on an annual basis
Pay a price linked to the average price of EU ETS allowances

Important date: The first surrender of CBAM certificates will take place on September 30, 2027 for goods imported during 2026.

2. Quarterly certificate holding obligation (from 2027)

During the calendar year, importers must ensure that at the end of each quarter they hold certificates covering at least 50% of the embedded emissions since the beginning of the year. This obligation was reduced from the originally planned 80% to ease the pressure on liquidity.

3. “Authorised CBAM Declarant” status

A new requirement: only companies with “Authorised CBAM Declarant” status may import CBAM goods into the EU from January 1, 2026.

Deadlines:

March 31, 2026: the final deadline for applying for this status
Importers may continue to import goods while waiting for a decision on their application
The application must be submitted before the 50-tonne threshold is exceeded

4. Threshold: 50 tonnes per year

An important relief: a “de minimis” threshold of 50 tonnes per year (per importer) has been introduced. Importers whose total annual imports of CBAM goods do not exceed 50 tonnes are exempt from the obligations of reporting, declaring and surrendering certificates.

Exception: The threshold does NOT apply to hydrogen and electricity.

5. Extended deadline for the annual declaration

The deadline for the annual CBAM declaration and surrender of certificates has been moved from May 31 to September 30 of the following year, giving importers additional time to verify data and acquire certificates.

6. Certificate sales start in February 2027

CBAM certificates will be available for purchase through a central EU platform starting in February 2027, and they cover emissions from goods imported during 2026. The certificate price will be based on the average value of EU ETS allowances from 2026.

7. The phase-in pace: why we have time, but no room to wait?

Although the certificate price will be based on market value (e.g. 60-80 EUR), it is important to know that from 2026 the full amount is not paid. CBAM is introduced gradually through a so-called phase-in period, to align it with the phasing out of free allowances within the EU:

2026 - 2028: Only a small part of the total price is paid (starting with just 2.5% in 2026, rising to 10% in 2028).
2029 - 2033: Costs accelerate and jump sharply (as early as 2029, 22.5% is paid, while in 2030 it is as much as 48.5%, a rate that stays until 2033).
2034: Full application and payment of 100% of the value of emissions.

Why does this matter? This “window” of the first three years is an opportunity for Serbian exporters to test their monitoring systems at minimal cost. The goal is that by 2029, when the financial pressure on EU importers becomes serious, you already have an optimized process and verified data that will give you an advantage over the competition.

Who is affected? The perspective of Serbian manufacturers

Directly affected sectors

Steel: Manufacturers of steel products, foundries, structures, pipes, profiles

Aluminium: Manufacturers of profiles and alloys, processors of secondary aluminium

Fertilizers: Manufacturers of ammonia, nitrogen fertilizers and derivatives

Cement: Manufacturers of clinker and finished cement products

What happens in the supply chain?

Scenario: A Serbian manufacturer exports to the EU

The EU customer (importer) submits the CBAM declaration
It asks the Serbian supplier for verified emissions
Without verified data → default values (2-3x higher costs)

Critical point: The lack of verified emissions directly affects the costs of the EU customer, and with them the competitiveness of the Serbian manufacturer.

Default values vs. actual emissions: the financial impact

This is perhaps the most important aspect to understand.

What are default values?

Default values are average emissions for a given product, deliberately set HIGH to encourage producers to set up monitoring and use actual (lower) values.

Example for steel:

Verified emissions (modern process): 1.37 t CO2/tonne
Default values (China): 3.17 t CO2/tonne
Difference: more than double!

For a Serbian manufacturer exporting 1,200 tonnes of steel a year, this means:

With default values: €266,280 CBAM cost
With verified values: €115,080 CBAM cost
Savings for the EU customer: €151,200 per year

The EU customer will probably:

Ask the supplier to lower the price
Switch to a competitor with verified emissions
Or accept the higher costs (unlikely)

Key dates 2026-2028

2026

January 31: The last quarterly report of the transitional period (Q4 2025)
March 31: Deadline to apply for authorised declarant status
During the year: Emissions monitoring

2027

February: Start of CBAM certificate sales (price based on the EU ETS 2026 average)
September 30: First annual declaration + surrender of certificates for 2026: THE FIRST REAL PAYMENT
Certificate holding obligation (min. 50% of quarterly emissions)

2028

January 1: Extension to ~180 additional products (steel/aluminium products, machinery, vehicles)
By 2034: Complete phase-out of free allowances, a penalty of €100/tCO2 for missing certificates

Implementation in Serbia: emissions tax has arrived here too

Serbia introduced a tax on greenhouse gas emissions from January 1, 2026

In parallel with the entry into force of the EU CBAM system, Serbia introduced its own “carbon pricing” system through two new laws published in December 2025:

1. Law on the Tax on Greenhouse Gas Emissions

“Official Gazette of RS”, No. 109/2025
Application: from January 1, 2026
A “carbon tax” on domestic production

2. Law on the Tax on Imports of Carbon-Intensive Products

“Official Gazette of RS”, No. 109/2025
Application: from January 1, 2026
The Serbian CBAM equivalent for imports

This is Serbia’s direct response to the EU CBAM, and it makes Serbia one of the few countries outside the EU to have introduced a “carbon pricing” mechanism before becoming a member of the Union.

The Law on the Emissions Tax (domestic production)

Taxpayers: Legal entities and entrepreneurs who hold a GHG emissions permit and carry out the following activities:

Manufacture of artificial fertilizers and nitrogen compounds
Manufacture of cement
Manufacture of pig iron, steel and ferro-alloys
Manufacture of aluminium
Electricity generation

Tax rate:

4 euros per tonne of CO2eq (dinar equivalent at the NBS middle exchange rate)

Tax base:

Total emissions MINUS reference emissions
Reference emissions = unavoidable emissions despite using the best available technology
This is the equivalent of the EU ETS “free allowances” concept

Tax credit for EPS (electricity):

20% of investments in emission reduction measures
Up to a maximum of 80% of the tax liability
Valid for 10 years

Deadlines:

Tax return: by May 31 for the previous year
Payment: within the deadline for filing the return

The Law on the Import Tax (Serbian CBAM)

Taxpayers: Importers of carbon-intensive products into the Republic of Serbia

Covered products:

Iron and steel (the same CN codes as the EU CBAM)
Cement
Fertilizers (ammonia, nitric acid, urea, etc.)
Aluminium

Tax rate:

4 euros per tonne of CO2eq

Tax base: Two scenarios:

Actual quantity of emissions: confirmed by a validator, reduced by the reference quantity
Estimated quantity of emissions: default values (if there is no verified report)

KEY: Tax credit for exporters The importer is entitled to a tax credit equal to the “carbon price” paid in the country of origin of the product!

The deduction is recognized if there is proof of payment
It cannot be higher than the proportional amount of the Serbian tax
This makes it possible to avoid double taxation

Threshold:

Mandatory only if imports exceed 5 tonnes per year

Comparison table: EU CBAM vs. the Serbian tax

Aspect	EU CBAM (exports to the EU)	Serbian tax (domestic production)
Taxpayer	EU importer	Serbian installation operator
Rate	~€70/tonne CO2 (EU ETS price)	€4/tonne CO2
Payment deadline	September 30	May 31
Tax credit	Yes: the tax from the country of origin is recognized	Yes: for EPS, 20% of investments
Sanctions	€100/tCO2 of certificates not surrendered	Tax offences

Key difference: The difference in rates (4 vs 70 EUR) means that most of the cost is still borne by the EU customer, but part of the money stays in Serbia.

What does this mean for Serbian exporters to the EU?

GOOD NEWS: Tax deduction in the EU CBAM calculation!

The Serbian manufacturer pays the domestic tax (4 EUR/tonne CO2), and the EU customer can deduct that amount from its CBAM obligation.

Result: The tax money stays in Serbia instead of going to the EU budget!

Additional advantage: Since Serbian manufacturers are already in a system with verified reports for the domestic emissions tax, it is easier for them to provide verified emissions to EU customers (instead of using default values).

The difference in rates: 4 EUR vs. 70 EUR

Why such a big difference?

The EU rate (~70 EUR/tonne) reflects:

20 years of operation of the EU ETS
A market price that encourages investment in decarbonization
The progressive reduction of free allowances

Serbia starts at 4 EUR/tonne because it is:

The first step in establishing carbon pricing
Avoiding an excessive initial burden on industry
Time for adjustment and investment in new technologies
Gradual growth is expected in the coming years

Practical implications for manufacturers

1. Two connected systems

A Serbian exporter to the EU now has:

A domestic obligation: The Serbian carbon tax (4 EUR/tonne), due May 31
An indirect obligation: The EU customer asks for verified emissions for CBAM

BUT, the systems are connected:

Verified reports for the Serbian system = the basis for EU CBAM data
One monitoring system can cover both requirements
The tax credit allows the tax paid in Serbia to be deducted

2. Reference emissions lower the tax base

Unlike the EU, where free allowances are being phased out gradually, the Serbian system has a permanent deduction of reference emissions: tax is paid only on emissions above the level of the best available technology.

3. An advantage for manufacturers who are ready

Whoever sets up a monitoring system now:

Avoids default values (double the costs)
Gets verified emissions for EU customers more easily
Is ready for future rate increases

4. EPS has a special status

Electricity producers pay the full amount for emissions, BUT they have a tax credit of 20% of investments in emission reduction (a maximum of 80% of the liability, valid for 10 years).

Future outlook

2026-2028: Getting used to the system, first payments, learning from practice

2028-2030: A likely increase in the tax rate (from 4 EUR towards higher levels), harmonization of methodologies with the EU

2030+: Possible integration with the EU ETS if Serbia becomes an EU member, one system for the domestic and EU markets

For now: Serbian manufacturers pay the carbon tax from January 1, 2026, and that amount can be deducted in their customers’ EU CBAM calculation.

Action steps for Serbian manufacturers

1. Exposure assessment (immediately)

Identify the CN codes of your products and check the CBAM categories
Quantify your annual exports to the EU (threshold of 50 tonnes per customer)
Contact your EU customers: declarant status, deadlines, data format, verifier

Key question: Do any of your customers import more than 50 tonnes per year?

2. Gap analysis

Assess:

Do you monitor CO2 emissions in production?
A system for monitoring energy and fuels?
Data on purchased electricity?
An understanding of the CBAM methodology for your sector?

Identify: What is missing, and who in the company is responsible for compliance?

3. Setting up monitoring

Technical requirements:

Monitoring of direct emissions (fuel, processes)
Monitoring of indirect emissions (purchased energy)
Documenting production quantities
Standard: EU ETS Monitoring & Reporting Regulation (MRR)

4. Data verification

CBAM requires verification by an accredited verifier (SGS, Bureau Veritas, TÜV).

No verification = default values = double the cost!

5. Data exchange with customers

CBAM Communication Templates (the standardized format of the European Commission)
Documentation: the verified report, the verifier’s opinion, supporting documents
Agree on realistic deadlines (verification takes several weeks)

6. Continuous monitoring

Regular updating of emissions data
Tracking changes in CBAM regulation
Process optimization to reduce emissions (a competitive advantage)
Do not wait for the end of the year; prepare data continuously

The carbon price in Serbia: a tax credit for exporters

One of the key aspects of the CBAM mechanism is the possibility of deducting the carbon price paid in the country of origin.

The situation from January 1, 2026:

Serbia HAS a carbon charging system through the Law on the Tax on Greenhouse Gas Emissions (109/2025):

Rate: 4 euros/tonne CO2eq
Taxpayers: operators of installations producing CBAM products

What this means for Serbian exporters:

A Serbian manufacturer that pays the domestic carbon tax (4 EUR/tonne CO2eq) can have that amount deducted when its EU customer calculates its CBAM obligation.

The deduction mechanism:

According to Article 12 of the Serbian Law on the Tax on Imports of Carbon-Intensive Products:

An importer into Serbia can deduct the carbon price paid in the country of origin
Reciprocity: The same principle applies to exports from Serbia to the EU
The EU CBAM regulation provides for the deduction of the carbon price from third countries

Financial benefit:

Instead of the entire CBAM cost going to the EU budget, part of the money stays in Serbia:

For the Serbian economy: the tax money stays here and can be used for the energy transition
For the manufacturer: no additional burden (the customer pays the same total amount as without the Serbian tax)
For competitiveness: a better position because it has verified emissions

The problem: the difference in rates (4 EUR vs. 70 EUR)

Although the Serbian tax can be deducted, the difference is large:

The Serbian manufacturer pays: 4 EUR/tonne CO2
The EU customer still has to pay: 66 EUR/tonne CO2
Total burden on the supply chain: 70 EUR/tonne

If the Serbian rate were equal to the EU rates (70 EUR/tonne), the entire amount would stay in Serbia.

Why did Serbia not choose the same rate as the EU?

Gradual introduction: avoiding an excessive initial shock
Adjustment: time for investment in new technologies
Political reality: a lower rate is easier to push through parliament
Progressive increase: the rate will probably rise in the coming years

Serbia is expected to gradually increase the rate in order to maximize the money that stays in the country and to harmonize with the EU system.

Conclusion

CBAM has become a real business obligation. For Serbian manufacturers: two systems from January 1, 2026:

EU CBAM: an obligation of EU customers (indirectly affects suppliers)
The Serbian tax: a direct obligation (4 EUR/tonne, rising towards EU levels)

Key points:

Tax credit: the domestic tax is deducted, the money stays in Serbia
Verified emissions = 2-3x lower costs
One monitoring system covers both requirements
CBAM is expanding in 2028+; early adjustment = advantage

This is no longer just compliance; it is a strategic decision that affects your position on the EU market and your competitiveness over the next decade.

Need help?

Vetren Chemical Management Solutions supports Serbian manufacturers with CBAM compliance:

✅ Gap analysis and regulatory advisory
✅ Setting up emissions monitoring
✅ Coordination with verifiers
✅ Training and consulting

This blog post is for informational purposes only and does not constitute legal advice. For specific situations, consult a licensed chemical adviser or a lawyer specialising in chemical regulation.