Frequently asked questions about CBAM compliance

The Carbon Border Adjustment Mechanism (CBAM) is the European Union's carbon tariff on imports of cement, aluminum, iron & steel, fertilizers, electricity, and hydrogen. Established under EU Regulation 2023/956, it requires EU importers to purchase CBAM certificates equal to the carbon emissions embedded in these products. The certificate price equals the EU ETS carbon price, currently approximately €65–80 per ton of CO₂.

CBAM was created to prevent "carbon leakage" — the practice of moving production to countries with weaker climate policies to avoid EU carbon costs. By applying the same carbon price to imports that EU producers already pay under the EU ETS, CBAM creates a level playing field and protects EU industry from unfair competition.

CBAM covers six product categories:

1. Cement — including clinker, portland cement, and aluminous cement
2. Iron and steel — flat-rolled products, bars, rods, wire, tubes, and pipes
3. Aluminum — unwrought aluminum, bars, rods, profiles, and wire
4. Fertilizers — ammonia, nitric acid, urea, ammonium nitrate, and mixed fertilizers
5. Electricity — direct electricity imports
6. Hydrogen and hydrogen-based fuels

CBAM entered its definitive phase on January 1, 2026. Key deadlines: first CBAM certificate purchases required by February 1, 2027; first annual CBAM declarations due September 30, 2027. The transitional phase (October 2023–December 2025) required only reporting, with no financial obligations.

EU importers (declarants) are legally responsible for purchasing CBAM certificates and submitting annual declarations. However, the cost of CBAM certificates is passed to exporters through pricing, and exporters must provide accurate emissions data to their EU importers to enable compliance. Exporters who fail to provide data will be assessed at punitive default values.

CBAM applies only to the six covered product categories listed in Annex I of EU Regulation 2023/956. It does not apply to all exports. For example, textiles, electronics, chemicals (other than covered fertilizers), and food products are not covered by CBAM.

No. CBAM applies to imports from all countries regardless of trade agreements. Morocco, Tunisia, and Algeria's Association Agreements with the EU do not provide any CBAM exemption. The only exception is for countries that have adopted carbon pricing mechanisms equivalent to the EU ETS, which can offset CBAM costs.

CBAM is phased in gradually alongside the reduction of free EU ETS allowances. The percentage of embedded emissions covered increases progressively:

• 2026: 2.5%  ·  2028: 48.5%  ·  2030: 68.5%  ·  2032: 86%  ·  2034: 100%

This is debated in international trade circles. The EU designed CBAM to comply with WTO non-discrimination principles. Several countries, including China, India, and Turkey, have challenged CBAM's WTO compatibility. As of March 2026, no WTO dispute ruling has been issued. Maghreb exporters should plan for CBAM enforcement regardless of WTO proceedings.

CBAM is established under EU Regulation No. 2023/956 of the European Parliament and of the Council, published in the Official Journal of the European Union on May 16, 2023. The implementing regulations are Commission Implementing Regulation (EU) 2023/1773 and Commission Delegated Regulation (EU) 2024/949.

CBAM cost = Total embedded emissions (tCO₂e) × EU ETS carbon price (€/ton) − Any applicable carbon price deduction.

Embedded emissions = Scope 1 direct process emissions + Scope 2 indirect electricity emissions.

Example: 5,000 tons of cement at 0.6 tCO₂/ton × €80/ton CO₂ = €240,000/year in CBAM costs.

The EU ETS carbon price fluctuates based on market conditions. In early 2026, the price is approximately €65–80 per ton of CO₂. Long-term projections suggest €100–130/ton by 2030 as EU climate ambitions increase. Higher future prices make accurate emissions reporting even more critical.

EU default values are worst-case emission assumptions applied by the EU when importers cannot provide verified actual data. They are set at the 90th percentile of the emission intensity of EU ETS installations — meaning they are higher than 90% of actual EU facilities. For Maghreb exporters, actual emissions are typically 20–40% lower than these defaults.

Approximate tariff equivalents under EU default values at current ETS prices:

• Tunisia cement: 104%
• Algeria fertilizers: 95%
• Algeria iron & steel: 95%
• Tunisia iron & steel: 25%
• Morocco aluminum: 23%
• Tunisia aluminum: 14%

With actual emissions data, effective tariff equivalents typically fall to 5–20%.

If your country has a carbon pricing mechanism that the European Commission recognizes as equivalent, you can deduct the carbon price paid locally from your CBAM liability. As of March 2026, Morocco, Tunisia, and Algeria do not have qualifying carbon pricing mechanisms. This may change as these countries develop climate policies.

For most Maghreb exporters, switching from EU defaults to actual emissions data saves 20–30% on CBAM certificate costs.

For a typical Tunisian cement exporter shipping 5,000 tons/year to the EU at €80/ton CO₂: default values cost = €320,000/year, actual values cost = €240,000/year, savings = €80,000/year — plus verification cost savings of €8,000–15,000/year.

In Morocco, Tunisia, and Algeria, verification costs related to export compliance are generally deductible as business expenses. Consult with your local tax advisor for specifics. virESG can provide documentation of verification-related costs for tax purposes.

Morocco's ONEE (Office National de l'Electricité et de l'Eau Potable) grid emission factor is approximately 0.48–0.55 kgCO₂/kWh. This is the value used for calculating Scope 2 (indirect electricity) emissions for Moroccan manufacturers. virESG's ONEE integration automatically retrieves current grid emission factors.

Tunisia's STEG (Société Tunisienne de l'Electricité et du Gaz) grid emission factor is approximately 0.52–0.60 kgCO₂/kWh. While higher than Morocco's, it remains significantly lower than EU conservative default values. Using actual STEG data reduces Scope 2 emissions calculations and CBAM costs for Tunisian manufacturers.

Algeria's Sonelgaz grid emission factor is approximately 0.42–0.50 kgCO₂/kWh — the lowest in the Maghreb, reflecting Algeria's predominantly natural gas-fired generation. This inherent advantage is captured through virESG's Sonelgaz integration, reducing Scope 2 emissions calculations and CBAM costs.

Yes. OCP Group's fertilizer exports to the EU — including ammonia, urea, phosphate fertilizers, and compound fertilizers — are directly covered by CBAM. OCP Group is among the most strategically exposed companies in North Africa due to its scale. OCP has the internal resources to build compliance infrastructure but benefits from virESG's EU registry integration and local verifier network.

Algeria's most CBAM-affected sectors:

• Fertilizers — Fertial/Asmidal complex at Annaba, natural gas-based ammonia and urea production — 95% tariff equivalent without actual data
• Iron & steel — Tosyali Algeria and Annaba steel complex — 60% of production value exposed
• Cement — Algeria is the EU's 5th largest cement supplier

Algeria's natural gas-dominated energy system means actual emissions are significantly lower than EU defaults in all three sectors.