Four general guides plus six sector guides: practical guidance with examples
On August 14, 2026, the European Commission published a series of 10 guidance documents to support compliance during CBAM’s definitive period. The package comprises four general guides (No. 1: introduction to CBAM concepts; No. 2: a quick guide for non-EU operators; No. 3: calculation of embedded emissions; No. 4: calculation of the EU ETS free-allocation adjustment) and six sector guides (No. 5a–5f: cement, hydrogen, fertilizers, iron and steel, aluminium, and electricity). Each sector guide covers production processes, value chains, and monitoring and reporting considerations, with worked calculation examples. Its main audiences are operators of covered installations outside the EU, authorised CBAM declarants, and verifiers.
CBAM, based on EU Regulation 2023/956 adopted on May 10, 2023, began with a reporting-only transitional period in October 2023 and entered its definitive phase on January 1, 2026, when certificate purchases and surrender became mandatory. Obligations are designed to tighten progressively: certificates for only 2.5% of embedded emissions are needed in 2026, increasing annually to 100% coverage in 2034. Guide No. 4 explains how the number of certificates is adjusted for EU ETS free allocation; where an EU ETS participant receives free allocation, the CBAM surrender obligation is reduced accordingly.
This curve is the counterpart to the phased reduction of free ETS allocation. While CBAM implementation references broadly align on the 2026–2028 figures, the values after 2030—including the sharp rise to 48.5%—have been subject to political adjustment. In practice, they are safer to treat as current assumptions rather than fixed values. The steep 22.5% to 48.5% increase from 2029 to 2030 itself follows the timetable for reducing free allocation.
Expansion to about 180 additional product categories is proposed
Current CBAM covers primary materials—iron and steel, aluminium, cement, fertilizers, hydrogen, and electricity. The EU has proposed extending it to about 180 product categories made from these materials, including machinery, automotive components, white goods, and construction electrical equipment. If adopted, finished-goods and semi-finished-goods manufacturers, not just primary-metal producers, would enter the scope. The mechanism that deducts carbon prices already paid in the exporting country, leaving only the difference from the EU-equivalent price, would remain.
Practical issues facing South African exporters
According to an analysis by law firm Werksmans, South Africa, together with China, India, and Brazil, has officially criticised CBAM as a WTO-inconsistent and unfair burden on developing countries. But CBAM is an EU-law measure applied automatically and unilaterally; it does not require national consent or a treaty. Political objections do not suspend exporters’ compliance obligations.
Scope-expansion risk
The proposed expansion reaches beyond current primary materials such as iron, steel, and aluminium to around 180 finished and semi-finished categories. Downstream manufacturers could also become covered.
Offset through domestic carbon tax
CBAM can deduct a carbon price already paid in the exporting country; South Africa’s domestic carbon tax may qualify. To receive the deduction, however, verified emissions-data and reporting systems are a prerequisite.
Importance of data quality
Even after paying carbon tax, inadequate verification and reporting of emissions data may prevent EU-side deductions, creating a situation close to double charging.
Werksmans notes that South Africa’s domestic carbon tax can potentially offset CBAM costs, but appropriate verification and reporting of emissions data is a condition for receiving the deduction. If data quality is inadequate, a deduction may not be recognised by the EU despite carbon tax having been paid. This is a risk shared by exporters across emerging economies, not only South Africa.