EU CBAM For Fertiliser Importers 2026–2027
Nitrogen Products, Supplier Emissions Data, Verification and Certificate Liability Under the EU CBAM Definitive Regime
Published: September 2026
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1. Executive Summary
The EU CBAM definitive regime entered force on 1 January 2026, and every EU CBAM fertiliser importer above the 50-tonne annual net-mass threshold is now operating inside a live financial compliance cycle. The first annual CBAM declaration covering 2026 imports — requiring reported embedded emissions and full certificate surrender — is due on 30 September 2027, as confirmed by the European Commission's Q&A of 27 May 2026. The European Commission published its sector-specific fertiliser guidance, Guidance No. 5c, on 14 August 2026, giving importers a defined methodology for the first time under the definitive regime. Most compliance teams have not yet operationalised the data collection, supplier engagement and verification arrangements that methodology demands.
This report converts the Commission's 2026 fertiliser guidance, the amended Regulation (EU) 2025/2083 and the corrected default-value tables from Implementing Regulation (EU) 2026/1740 into a compliance management framework. Three features of fertiliser CBAM make it operationally harder than other covered sectors.
First, embedded emissions are calculated using kg of nitrogen as the functional unit, not tonnes of finished product — meaning importers must know the nitrogen content of every product line, and a per-tonne calculation will produce an incorrect declaration.
Second, when ammonia or nitric acid is produced at a separate installation from the finished fertiliser, the importer must trace and document the upstream precursor emissions, not just the granulation-plant data.
Third, the supplier-data problem is acute: non-EU fertiliser producers are not legally obligated to provide installation-level monitoring data, and the importer's only contractual leverage must be built before renewal of supply agreements. The compliance task begins with supplier engagement now, not with declaration preparation in mid-2027.
The 30 September 2027 deadline is not the start of a filing exercise. It is the final output of a twelve-month data-collection, verification and certificate-management programme that must be running by the end of 2026 at the latest. The single most important action for a Compliance Manager before 31 December 2026 is to issue standardised supplier data requests to every non-EU nitrogen fertiliser production installation, contract a CBAM-accredited verifier, and build a provisional certificate liability model using the confirmed Q1 and Q2 2026 CBAM certificate prices of €75.36/tCO₂ and €75.28/tCO₂ respectively.
2. Regulatory Context
The EU CBAM definitive regime represents a structural change in how embedded carbon in imported goods is priced. For fertiliser importers specifically, 2026 is not a continuation of the transitional period — it is the first year in which declarant status, emissions data and certificate obligations carry direct financial consequences. Three foundational questions must be answered before any exposure can be calculated: has the regime changed since the transitional period? Which products are in scope? And has the importer obtained the legal status required to import them?
2.1 EU CBAM Enters Its Definitive Phase: What Changed on 1 January 2026
FINDING: The definitive EU CBAM regime entered force on 1 January 2026 under Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083 (8 October 2025). The transitional €150 per-consignment threshold was repealed; the operative threshold is now 50 tonnes annual net mass across all in-scope CBAM goods per importer per calendar year.
SO WHAT: Fertiliser importers above 50 tonnes who have not obtained authorised CBAM declarant status are importing unlawfully from 1 January 2026 — the registration is a precondition of import, not a post-import administrative step.
NOW WHAT: Importers must confirm authorised declarant status through the CBAM Registry before making any further nitrogen fertiliser imports above the 50-tonne threshold. Any importer who has not yet applied should do so without delay — the Omnibus amendment's transitional provisions for pending applications do not provide indefinite cover for ongoing unlawful imports.
The shift from the transitional to the definitive regime is not incremental. In the transitional period (October 2023 to December 2025), importers submitted quarterly emissions reports with no financial obligation attached. From 1 January 2026, three financial obligations operate simultaneously: declarant status is required before each import, an annual declaration reporting embedded emissions must be filed, and certificates corresponding to reported emissions must be surrendered. An importer who treated 2025 as a preparation phase and 2026 as a continuation of that phase is now in a live compliance breach.
The Omnibus amendment — Regulation (EU) 2025/2083 — made the 50-tonne threshold the sole applicable test for fertilisers, aluminium, cement, iron and steel. Hydrogen and electricity do not benefit from the 50-tonne exemption: importers of those products require authorised declarant status regardless of volume. For nitrogen fertiliser importers, the threshold is applied across all CBAM goods in aggregate, not per product or per CN code. An importer bringing in 30 tonnes of urea and 25 tonnes of ammonium nitrate in a calendar year has exceeded the 50-tonne threshold and holds full obligations.
2.2 Fertiliser Sector Scope: Which CN Codes Trigger CBAM
FINDING: Nitrogenous fertilisers under CN 3102 are confirmed in Annex I of Regulation (EU) 2023/956, with additional in-scope coverage extending to nitric acid (CN 2808), ammonia (CN 2814), potassium nitrate (CN 2834) and multi-nutrient fertilisers (CN 3105, excluding CN 3105 60 00). Every import of these products by an authorised declarant above the 50-tonne annual threshold must be declared, with embedded emissions calculated and certificates surrendered.
SO WHAT: An importer who has not audited their product portfolio against the Annex I CN code list cannot determine their CBAM scope — and risks either underdeclaration (leaving certificates short on 30 September 2027) or omitting products that should have been reported.
NOW WHAT: Conduct a CN code audit of all nitrogen fertiliser import lines against the Annex I list in Table 1 below before 31 December 2026 to establish a complete 2026 import baseline for the first annual declaration.
Table 1 — Fertiliser CN Code Scope: Annex I, Regulation (EU) 2023/956
CN Code | Product Description | In Scope | Key Notes |
2808 00 00 | Nitric acid; sulphonitric acids | Yes | Precursor good; direct CBAM product |
2814 10 00 | Ammonia, anhydrous | Yes | Precursor good; direct CBAM product |
2814 20 00 | Ammonia, in aqueous solution | Yes | Precursor good; direct CBAM product |
2834 21 00 | Potassium nitrate | Yes | N-containing; functional unit kg N |
3102 (entire heading) | Mineral or chemical fertilisers, nitrogenous | Yes | All 8-digit subheadings included |
3105 (heading, excl. below) | NPK and multi-nutrient fertilisers | Yes | Nitrogen-containing subheadings only |
3105 60 00 | Phosphorus-potassium fertilisers (no nitrogen) | NO | Explicitly excluded from Annex I |
Source: Annex I, Regulation (EU) 2023/956 (consolidated version). Importers should verify current 8-digit CN subheadings at EUR-Lex against their specific products.
The entire CN 3102 heading — all nitrogenous fertilisers — is in scope. This covers urea (3102 10), ammonium sulphate (3102 21), sodium nitrate (3102 50), ammonium nitrate (3102 30), calcium ammonium nitrate, and other nitrogen-only fertilisers. CN 3105 covers mixed fertilisers containing nitrogen alongside phosphorus and/or potassium, but explicitly excludes CN 3105 60 00 (phosphorus-potassium only, no nitrogen).
Ammonia (CN 2814) and nitric acid (CN 2808) are not merely precursors — they are independent CBAM goods in their own right. An importer of anhydrous ammonia for industrial use above the 50-tonne threshold holds its own separate CBAM obligation on that product, regardless of whether it is further processed within the EU.
2.3 Authorised CBAM Declarant: The Legal Threshold and What It Requires
FINDING: Under Regulation (EU) 2025/2083, Articles 2a, 4 and 5, only an authorised CBAM declarant may import CBAM-covered goods once the 50-tonne annual net-mass threshold is exceeded. The threshold is cross-sector and cumulative: 30 tonnes of urea plus 25 tonnes of ammonium nitrate exceeds the 50-tonne limit and triggers full declarant obligations.
SO WHAT: An importer who exceeds the 50-tonne threshold without declarant status is importing unlawfully, regardless of whether they intend to file a future declaration. Every subsequent in-scope shipment accumulates penalty exposure under Article 26(2) of Regulation (EU) 2023/956 as amended, at €300–500 per tonne CO₂ — the highest penalty tier in the CBAM framework.
NOW WHAT: Any importer that has not yet confirmed authorised declarant status in the CBAM Registry must apply immediately if in-scope nitrogen fertiliser imports in 2026 have exceeded or are expected to exceed 50 tonnes in aggregate with other CBAM goods.
For a detailed guide to the authorised declarant application process, registration requirements and compliance obligations, see CBAM Journal's report: EU CBAM Authorised Declarant (cbamjournal.com/post/eu-cbam-authorised-declarant).
Declarant status must be applied for through the CBAM Authorisation Management Module before the first import — the registration precedes the shipment, not the annual filing. Authorisation is available only to persons legally established within the EU customs territory; non-EU exporters cannot hold declarant status directly. The application requires the applicant to confirm they have not been subject to certain customs or tax violations within the preceding three years and to demonstrate financial and operational capacity to meet the CBAM obligations.
Once authorised, the declarant is responsible for the annual CBAM declaration, the quarterly certificate holding requirement and the September certificate surrender. These obligations cannot be delegated to a customs agent or logistics provider — they sit on the legal entity that holds declarant status.
3. Compliance Obligations
The four obligations facing an authorised EU CBAM fertiliser declarant interact directly — a failure at any one stage creates compounding exposure at the next, because each obligation feeds the one that follows it. A failure at supplier data collection creates a default-value fallback that increases certificate cost. A failure at verification prevents actual-value declaration. A failure at either leaves the declaration vulnerable to competent authority challenge.
3.1 Annual CBAM Declaration: What It Must Contain
FINDING: The first annual CBAM declaration covering 2026 imports is due on 30 September 2027, as confirmed by the European Commission's Q&A of 27 May 2026. The declaration must report total embedded emissions per CN code for all in-scope nitrogen fertiliser imports made during the full calendar year 2026, and must be accompanied by the surrender of certificates corresponding to the adjusted embedded emissions reported.
SO WHAT: Importers who begin data collection in mid-2027 will not have sufficient time to validate supplier emissions, complete third-party verification and procure the requisite certificates before the September deadline — the filing is the end product of a twelve-month programme, not the start of a compliance effort.
NOW WHAT: Map every 2026 shipment of in-scope nitrogen fertiliser now, establishing the full import baseline against which the 2026 declaration will be built. All emissions data for those shipments must be obtainable, verified and ready to declare by 30 September 2027.
For a detailed breakdown of the annual declaration structure, content requirements and submission process, see CBAM Journal's report: EU CBAM Annual Declaration 2027 (cbamjournal.com/post/eu-cbam-annual-declaration-2027).
The declaration specification determines the entire data architecture the importer must build through 2026. For each CN code reported, the declaration must contain: the quantity of goods expressed in kg of nitrogen, the total embedded emissions associated with those imports, the verification status of those emissions (actual verified or default), and the certificates being surrendered. If a carbon price was paid in the country of production of a good, the declarant may claim a deduction for that payment, subject to the conditions established in Implementing Regulation (EU) 2025/2548.
The certificates surrendered must correspond to the adjusted embedded emissions — total embedded emissions less any applicable free-allocation adjustment and less any verified carbon-price deduction. Getting the embedded-emissions figure wrong, either through incorrect functional-unit application or through unsupported actual-value claims, directly affects the number of certificates required and the financial exposure if a competent authority review identifies a shortfall.
3.2 Embedded Emissions: The Nitrogen Functional Unit and Fertiliser Methodology
FINDING: The Commission's Guidance No. 3 (14 August 2026) and Guidance No. 5c (14 August 2026) confirm that fertilisers use kg of nitrogen as the functional unit for embedded-emissions calculation, not tonnes of finished fertiliser. Direct embedded emissions are calculated against this unit, and precursor emissions — from ammonia and nitric acid production — must be attributed where those precursors form part of the production process at separate installations.
SO WHAT: An importer using a per-tonne-of-finished-product calculation rather than a per-kg-N calculation will misstate embedded emissions — potentially underpaying certificates (triggering penalty and catch-up obligation) or overpaying (a financial waste that could have been avoided with correct methodology).
NOW WHAT: Compliance teams must obtain the nitrogen content, expressed as kg of N per tonne of product, for every in-scope fertiliser import line from each non-EU supplier. Request this alongside production-process information by 31 December 2026 to allow sufficient time for verification before the September 2027 declaration.
Table 2 — Fertiliser Embedded-Emissions Calculation Framework
Product | CN Code | N Content (% N, approx.) | kg N per tonne | Functional Unit | Precursor Attribution Required? |
Urea | 3102 10 | ~46% | ~460 kg N/t | kg N | Yes — ammonia production |
Ammonium Nitrate (AN) | 3102 30 | ~34% | ~340 kg N/t | kg N | Yes — ammonia + nitric acid |
Calcium Ammonium Nitrate (CAN) | 3102 60 | ~26–27% | ~260–270 kg N/t | kg N | Yes — ammonia + nitric acid |
Urea Ammonium Nitrate (UAN) | 3102 80 | ~28–32% | ~280–320 kg N/t | kg N | Yes — both precursor chains |
Ammonium Sulphate | 3102 21 | ~21% | ~210 kg N/t | kg N | Yes — ammonia production |
Anhydrous Ammonia | 2814 10 00 | ~82% N equivalent | ~820 kg N/t | kg N | No — is itself the precursor |
Nitrogen content figures are approximate industry reference values. Actual nitrogen content for each shipment must be confirmed from the supplier's product specification or analytical certificate. Source: Commission Guidance No. 3 and No. 5c, 14 August 2026.
The key distinction from other CBAM sectors is that the calculation denominates emissions per unit of nitrogen content, not per tonne of physical goods crossing the border. Two shipments of equal weight but different products — say, 500 tonnes of urea versus 500 tonnes of CAN — carry different CBAM emission profiles because their nitrogen content differs. The implications extend to record-keeping: the importer's documentation must capture not just the tonnage and CN code but the nitrogen content of each shipment.
3.3 Actual vs Default Emissions: The Compliance Decision Framework
FINDING: Implementing Regulation (EU) 2026/1740, published on 10 August 2026, corrected the definitive-period default values established by Implementing Regulation (EU) 2025/2621. For fertilisers, the statutory mark-up applied to default values is 1% throughout all years — a deliberate policy exception from the escalating 10%–20%–30% mark-up that applies to other CBAM sectors (steel, aluminium, cement, hydrogen), reflecting food security considerations under Regulation (EU) 2025/2083.
SO WHAT: The financial incentive to switch from default to actual values for fertilisers is not the statutory mark-up (which is only 1%) — it is the difference between the country-specific average emission intensity embedded in the default value and the actual emission intensity of the importer's specific supplier. If the supplier's actual emissions are materially below the country default, actual values reduce certificate cost.
NOW WHAT: For every significant nitrogen fertiliser supplier, compare the applicable country-specific default value from Implementing Regulation (EU) 2025/2621 against the supplier's expected actual emission intensity before 31 October 2026 — this comparison determines whether the investment in supplier data collection and verification is financially justified.
Table 3 — Actual vs Default Emissions: Decision Matrix
Scenario | Recommendation | Financial Logic | Verification Required | Risk Level |
Supplier data available; actual emissions below country default | Use actual values | Certificate saving = (default − actual) × kg N × cert price | Yes — accredited verifier required | Low if data quality confirmed |
Supplier data available; actual emissions above country default | Use default values | Default values produce lower certificate cost | No | Low |
Supplier provides partial data only | Identify gaps; request completion by Jan 2027; fall back to defaults if unresolved | Partial data cannot support actual-value declaration | Yes — only if gaps resolved | Medium — timeline risk |
Supplier refuses or cannot provide data | Apply default values | Default values apply by operation of Regulation (EU) 2023/956 | No | Medium — financial risk if default is high |
Supplier data cannot be verified | Apply default values | Unverified actual data cannot support a definitive-regime declaration | N/A | High — declaration vulnerable to challenge |
The 1% mark-up on fertiliser defaults means the decision to invest in actual-value reporting is principally an economic question about the gap between the country default and the specific supplier's emission intensity. For a supplier operating a modern, gas-efficient ammonia plant, actual emissions may be substantially below the country average used in the default — making actual values the financially rational choice. For importers sourcing from countries with high assigned default values in Implementing Regulation (EU) 2025/2621, actual-value reporting is more likely to be financially justified — the saving from using verified actual emissions over the assigned country average is the primary driver, not the 1% mark-up itself.
3.4 Supplier Emissions Evidence Requirements: What the Importer Must Obtain
FINDING: The Commission's Guidance No. 5c (14 August 2026) specifies that actual embedded-emissions reporting for fertilisers requires installation-level monitoring data, production-process information and, where precursors are produced at separate installations, upstream emissions data from those precursor facilities. Verification of actual values by an accredited CBAM verifier is required under the definitive regime.
SO WHAT: An importer whose supplier cannot or will not provide installation-level monitoring data cannot file an actual-value declaration — they must apply default values and budget the certificate cost accordingly. An importer who accepts supplier-provided data without confirming its verifiability risks submitting an unverifiable declaration, which a competent authority review can challenge.
NOW WHAT: Issue supplier data requests to all non-EU nitrogen fertiliser producers by 30 November 2026, specifying the exact data fields required under Guidance No. 5c, the verification consent required, and a supplier response deadline of 31 January 2027. Include a CBAM data-provision clause in any supply agreement renewed or renegotiated before year-end 2026.
Table 4 — Supplier Data Evidence Checklist
Data Field | Legal Basis | From Supplier | Actual Values | Default Values |
Installation name and location | Guidance No. 5c | Yes | Yes | No |
CN code(s) of goods produced at installation | Reg. (EU) 2023/956, Art. 7 | Yes | Yes | No |
Production volume for monitoring period (kg N basis) | IR (EU) 2025/2547 | Yes | Yes | No |
Direct emissions from production process (tCO₂e/kg N) | Guidance No. 3 + No. 5c | Yes | Yes | No — default used instead |
Monitoring methodology or monitoring plan applied | IR (EU) 2025/2547 | Yes | Yes | No |
Ammonia production emissions (if from separate installation) | Guidance No. 5c | Upstream supplier | Yes (where applicable) | No |
Nitric acid production emissions (if from separate installation) | Guidance No. 5c | Upstream supplier | Yes (where applicable) | No |
Carbon price paid in country of production | IR (EU) 2025/2548 | Supplier / gov. source | Only if deduction claimed | No |
Nitrogen content (% N) of each product supplied | Guidance No. 3 | Supplier (product spec) | Yes | Yes — needed for correct default application |
Verification consent (CBAM verifier access) | DR (EU) 2025/2551 | Supplier | Yes | No |
Product specification / analytical certificate | Good practice | Supplier | Yes | Yes |
The supplier-data problem is the most operationally difficult compliance challenge in fertiliser CBAM. Legislation specifies what data must exist; it does not compel non-EU producers to provide it to EU importers. Compliance teams that have not built data-provision into supply contracts must address this through commercial leverage — making data provision a condition of continued or renewed business.
Where a supplier provides data but refuses access for third-party verification, the data cannot support an actual-value declaration under the definitive regime. Verification is not optional for actual values. An importer who discovers this restriction in Q2 2027 cannot retrospectively obtain verified actual data for 2026 imports — they will be forced onto defaults for the full year.
3.5 Verification: Who Can Verify, What They Review and When to Engage
FINDING: The European Commission published guidance on CBAM verification and accreditation for verifiers and National Accreditation Bodies on 24 August 2026. CBAM verifier registration with the CBAM Registry was scheduled to open in September 2026, consistent with the Commission's August 2026 verification guidance. Verification by an accredited CBAM verifier is mandatory for all actual-value embedded-emissions declarations under the definitive regime.
SO WHAT: If a verifier has not completed fieldwork and issued a verification report before the September 2027 declaration window opens, the importer cannot file an actual-value declaration for 2026 imports — they must revert to default values, potentially increasing certificate cost significantly where their supplier's actual emissions are below the country default.
NOW WHAT: Contract a CBAM-accredited verifier before 31 December 2026 for verification of 2026-import actual-value emissions. Plan verification fieldwork for Q1–Q2 2027 to allow the verification report to be issued before the 30 September 2027 declaration window.
For a comprehensive guide to CBAM verifier accreditation requirements, evidence standards and engagement timelines, see CBAM Journal's report: EU CBAM Verification 2026–2027 (cbamjournal.com/post/eu-cbam-verification-2026-2027).
Verifiers must carry accreditation from a National Accreditation Body and must have demonstrated sector competence — for fertilisers, this means direct familiarity with nitrogen-based production process monitoring and precursor-chain attribution. Importers should confirm that any verifier they engage has fertiliser-sector experience before contracting.
What verifiers assess: the completeness of the emissions data provided by the production installation, whether the monitoring methodology applied is consistent with the requirements of Implementing Regulation (EU) 2025/2547, whether precursor emissions have been correctly attributed, and whether the embedded-emissions figure per kg of nitrogen is calculated accurately. The verifier produces a verification report that forms part of the annual declaration submission.
Engaging a verifier late is the single most avoidable cause of declaration failure. The fertiliser verification market is still establishing itself in 2026, and available verifier capacity will tighten as the 30 September 2027 deadline approaches and all CBAM sectors compete for accredited verifiers simultaneously.
4. Key Dates and Deadlines
Every material compliance action between September 2026 and May 2028 carries a specific regulatory deadline, and missing any one of them creates compounding exposure across the others. The combined EU and UK timeline below identifies each date and the specific importer action it triggers.
Table 5 — EU and UK CBAM Combined Compliance Timeline
Date | EU CBAM Event | UK CBAM Event | Importer Action Required |
1 Jan 2026 | Definitive regime live | — | Confirm authorised declarant status; begin 2026 import baseline |
10 Aug 2026 | Corrected default values published (IR 2026/1740) | — | Update default-value exposure models |
14 Aug 2026 | Guidance No. 3 and No. 5c (fertilisers) published | — | Review fertiliser-specific methodology; update data request templates |
24 Aug 2026 | Verification and accreditation guidance published | — | Begin verifier selection process |
Sep 2026 | CBAM verifier registration scheduled to open | UK illustrative rate expected (Autumn 2026) | Shortlist and approach verifiers; monitor HMRC for UK rate |
5 Oct 2026 | Q3 2026 official CBAM certificate price published | — | Update provisional 2026 certificate liability model |
31 Oct 2026 | — | — | Supplier emission intensity vs default comparison complete; CN code audit complete |
30 Nov 2026 | — | — | Supplier data requests issued to all non-EU nitrogen fertiliser producers |
31 Dec 2026 | — | — | Verifier contracted; certificate purchase schedule in treasury planning; UK CBAM registration assessment complete |
1 Jan 2027 | Q4 2026 certificate price published; quarterly holding rule operative | UK CBAM starts | Begin quarterly certificate holding tracking |
1 Feb 2027 | EU CBAM certificate sales open | — | Begin phased certificate purchases per quarterly holding schedule |
31 Jan 2028 | — | UK first-year registration deadline | Confirm UK CBAM registration if threshold met |
31 Mar 2027 | Q1 2027 quarterly certificate check | — | Hold ≥50% of cumulative embedded emissions to date |
30 Jun 2027 | Q2 2027 quarterly certificate check | — | Hold ≥50% of cumulative embedded emissions to date |
30 Sep 2027 | Annual CBAM declaration due; certificate surrender for 2026 imports | Q3 2027 quarterly check | Submit declaration; surrender certificates |
31 Dec 2027 | First UK CBAM accounting year ends | First UK CBAM accounting year ends | Complete UK embodied emissions record for 2027 |
31 May 2028 | — | First UK CBAM return and payment due | File UK CBAM return for 2027 imports; pay UK CBAM charge |
The three most critical dates for a Compliance Manager are: 31 December 2026 (end of the window for supplier data collection and verifier engagement), 1 February 2027 (certificate sales open — the quarterly holding programme starts), and 30 September 2027 (declaration and surrender — the non-negotiable financial outcome date).
5. Financial Exposure and Risk
Fertiliser CBAM liability is not a single number. It is the product of four variables: which CN codes are in the import portfolio, what the nitrogen content is per product, what embedded-emissions figure is used (actual or default), and what the official CBAM certificate price is for each quarter of import. Two of these variables — Q3 and Q4 2026 certificate prices — are not yet published as of the research cut-off for this report. The financial model presented here uses confirmed official inputs and is explicit about which inputs remain outstanding.
5.1 Certificate Liability: How the Cost Is Calculated
FINDING: The European Commission's official CBAM certificate prices for 2026 imports are: Q1 2026 = €75.36/tCO₂, Q2 2026 = €75.28/tCO₂. Q3 and Q4 2026 prices are not yet published as of the report's research cut-off (2 September 2026). Q3 price is scheduled for publication on 5 October 2026.
SO WHAT: Importers cannot calculate a final 2026 certificate liability until Q4 prices are published in early 2027. However, Q1 and Q2 prices — which confirm a price band around €75/tCO₂ — provide a sufficient basis for provisional budgeting, treasury planning and the quarterly holding programme.
NOW WHAT: Build a provisional certificate liability model using the Q1/Q2 2026 price range as a proxy. Update the model on 5 October 2026 when Q3 prices are released and finalise the full-year model by January 2027 when Q4 prices are published.
For a detailed guide to certificate purchasing mechanics, the quarterly 50% holding requirement and the surrender process, see CBAM Journal's report: EU CBAM Certificate Surrender Explained (cbamjournal.com/post/eu-cbam-certificate-surrender-explained-2026-2027-part-i).
Table 6 — Certificate Cost Modelling Framework (Provisional — Q1/Q2 2026 Prices)
Import Scale | Annual Import Volume | Est. Nitrogen Content | Embedded Emissions Calculation | Q2 2026 Price | Liability Formula |
Small importer | ~200 t product (urea) | ~92 t N (apply supplier N% to import volume) | [Verified/default emission factor tCO₂e/t N] × 92 t N | €75.28/tCO₂ | Result × €75.28 |
Medium importer | ~1,000 t product (AN) | ~340 t N | [Verified/default emission factor tCO₂e/t N] × 340 t N | €75.28/tCO₂ | Result × €75.28 |
Large importer | ~5,000 t product (urea) | ~2,300 t N | [Verified/default emission factor tCO₂e/t N] × 2,300 t N | €75.28/tCO₂ | Result × €75.28 |
Emission factors must be sourced from country-specific and product-specific default values in Implementing Regulation (EU) 2025/2621 (default pathway) or from verified actual emissions data from the production installation (actual pathway). No authoritative universal emission intensity figure applies across all nitrogen fertiliser products or suppliers. The Q1 2026 price of €75.36/tCO₂ and Q2 2026 price of €75.28/tCO₂ are confirmed official figures from the European Commission's certificate price page. Update using the Q3 price (due 5 October 2026) when published.
Certificate price for each 2026 import is determined by the quarterly average of EU ETS auction prices in the quarter in which the import occurs — Q1 price applies to Q1 imports, Q2 price to Q2 imports, and so on. This is distinct from the ETS carbon spot price, which as of late August 2026 was approximately €83/tCO₂ (Dec-2026 EUA contract per Carbon Pulse reporting of 31 August 2026). That market price does not determine the official CBAM certificate price — the official quarterly average does.
Where a carbon price was paid in the country of production in respect of the embedded emissions in the imported goods, a deduction may be available under Implementing Regulation (EU) 2025/2548. The conditions and calculation methodology for this deduction require specific verification and are not automatic.
5.2 Quarterly Certificate Holding Requirement in 2027
FINDING: Under Regulation (EU) 2025/2083, authorised declarants must hold CBAM certificates corresponding to at least 50% of the embedded emissions in all in-scope goods imported since the beginning of the current year, assessed at each quarter-end throughout 2027. Certificate sales begin 1 February 2027.
SO WHAT: An importer who defers all certificate purchases to August 2027 will be in breach of the 50% quarterly holding requirement at every quarter-end from Q1 2027 onward — accumulating penalty exposure under Article 26 at each missed checkpoint, separate from any insufficiency at the September declaration.
NOW WHAT: Build a quarterly certificate purchase schedule from provisional 2026 embedded-emissions data before 1 February 2027 when certificate sales open. Incorporate the phased purchase programme into treasury cash-flow planning by 31 December 2026.
Table 7 — Quarterly Certificate Holding Schedule 2027
Quarter | End Date | Holding Requirement | Certificate Sales Status | Compliance Check |
Q1 2027 | 31 Mar 2027 | ≥50% of embedded emissions from Jan–Mar 2027 imports | Open from 1 Feb 2027 | Hold ≥50% at 31 March |
Q2 2027 | 30 Jun 2027 | ≥50% of embedded emissions from Jan–Jun 2027 imports (cumulative) | Open | Hold ≥50% at 30 June |
Q3 2027 | 30 Sep 2027 | ≥50% of Jan–Sep 2027 imports AND full 2026 surrender by same date | Open | Hold ≥50% at 30 Sep AND file/surrender 2026 declaration |
Q4 2027 | 31 Dec 2027 | ≥50% of embedded emissions from Jan–Dec 2027 imports | Open | Hold ≥50% at 31 December |
The quarterly holding requirement operates on a cumulative rolling basis. An importer who purchases 50% of Q1 embedded emissions at the Q1 checkpoint must then top up to 50% of the cumulative Q1+Q2 total by the Q2 checkpoint. The requirement does not reset. The time between certificate sales opening (1 February 2027) and the first quarterly compliance check (31 March 2027) is less than eight weeks — insufficient for a compliance team that has not planned its purchasing schedule in advance.
5.3 Penalty Exposure Under the Definitive Regime
FINDING: Under Article 26 of Regulation (EU) 2023/956 as amended by Regulation (EU) 2025/2083, the penalty for insufficient certificate surrender at the annual declaration deadline is €100 per tonne of CO₂ — the same rate as the EU ETS excess-emissions penalty. Paying the penalty does not extinguish the obligation to surrender the missing certificates. The penalty for importing without authorised declarant status is €300–500 per tonne CO₂e, applied by national competent authorities.
SO WHAT: An importer who surrenders fewer certificates than their reported embedded emissions on 30 September 2027 faces both the €100/tCO₂ penalty and the obligation to acquire and surrender the deficit certificates — meaning the total financial cost of a surrender shortfall is the penalty plus the face value of the missing certificates.
NOW WHAT: Maintain complete importation records, emissions data and certificate purchase records for all 2026 fertiliser imports and retain all CBAM compliance documentation until the end of 2031 (the end of the fourth year after the 2027 declaration year, as required by Article 5(6) of Regulation (EU) 2023/956).
For a complete analysis of definitive-regime penalty structures, enforcement risk and non-compliance strategies, see CBAM Journal's report: EU CBAM Penalties 2026–2027 (cbamjournal.com/post/eu-cbam-penalties-2026-2027).
The €100/tCO₂ penalty rate under the definitive regime is a structural enforcement change — the Omnibus amendment aligned the CBAM surplus-certificate penalty with the EU ETS excess-emissions rate to create uniform financial consequences across both regimes. The transitional penalty range of €10–€50 per tonne under Article 16 of Implementing Regulation (EU) 2023/1773 applied only to the 2023–2025 reporting obligations. It does not carry over to the definitive regime.
The two-tier penalty structure has direct governance implications. The standard authorised-declarant penalty (€100/tCO₂) applies to certificate shortfalls at declaration. The unauthorised-importer penalty (€300–500/tCO₂) applies to each shipment made without authorised declarant status — this is not a one-time fine but a per-tonne exposure on the embedded emissions in every unlawfully imported shipment. An importer who exceeded the 50-tonne threshold in January 2026 and has been importing without declarant status has been accumulating this exposure on every shipment since.
5.4 UK CBAM: Separate Financial Exposure from 1 January 2027
FINDING: UK CBAM begins 1 January 2027 under Finance Act 2026, Part 5. The financial mechanism is: embodied emissions × UK CBAM rate − applicable Carbon Price Relief, administered by HMRC under S.I. 2026/809. The registration threshold is £50,000 of CBAM goods over a 12-month rolling period or expected within the next 30 days. Final 2027 sector CBAM rates had not been published as of September 2026; HMRC states an illustrative rate is expected in autumn 2026.
SO WHAT: A business importing the same nitrogen fertiliser into both the EU and Great Britain faces two separate financial obligations — a certificate purchase and surrender mechanism for EU CBAM and an HMRC-administered tax charge for UK CBAM — with different registration thresholds, different financial calculations and different filing timelines.
NOW WHAT: Assess UK CBAM registration obligations using the forward-looking 30-day test and backward-looking 12-month test under HMRC guidance (updated 16 July 2026) and model UK CBAM exposure separately from EU CBAM once HMRC publishes illustrative rates in autumn 2026.
Table 8 — EU vs UK CBAM Mechanism Comparison
Feature | EU CBAM | UK CBAM |
Legal basis | Regulation (EU) 2023/956, as amended by Regulation (EU) 2025/2083 | Finance Act 2026, Part 5; S.I. 2026/809 |
Operative date | 1 January 2026 | 1 January 2027 |
Registration threshold | 50 tonnes annual net mass (cross-sector aggregate) | £50,000 of CBAM goods (12-month rolling or 30-day forward test) |
Financial mechanism | Purchase and surrender of CBAM certificates | HMRC-administered tax charge |
Calculation formula | Embedded emissions × CBAM certificate price − carbon-price deduction | Embodied emissions × UK CBAM rate − Carbon Price Relief |
Fertilisers in scope? | Yes — CN 3102, 3105, 2814, 2808, 2834 | Yes — fertilisers included at launch |
Electricity in scope? | Yes | No — excluded from UK CBAM initial scope |
Functional unit (fertilisers) | kg of nitrogen | Embodied emissions per tonne (methodology not yet fully published) |
Verification requirement | Mandatory for actual values (accredited CBAM verifier) | Requirement not yet fully specified at research cut-off |
Annual declaration deadline | 30 September (30 Sep 2027 for 2026 imports) | 31 May (31 May 2028 for 2027 imports) |
Administering body | EU national competent authorities + Commission (via CBAM Registry) | HMRC |
First sector rates published | Published quarterly (Q1/Q2 2026 confirmed) | Illustrative rate expected autumn 2026; final rates from 2027 |
Supplier emissions data collected for EU CBAM does not automatically satisfy UK CBAM — the two mechanisms treat precursor emissions differently, require separate registration processes, and calculate financial obligations under distinct frameworks. The two regimes have structural differences in how embedded precursor emissions are counted within a CBAM good, meaning the EU verification report for a given product cannot simply be adopted for the UK return — the embedded-emissions calculations may differ for the same physical shipment.
The filing and payment structures are entirely separate. The EU declaration and surrender deadline is 30 September of each year for the prior year's imports. The UK CBAM return and payment deadline is 31 May of each year for the prior year's imports. The two deadlines do not coincide and require independent preparation.
6. Sector-Specific Impact Analysis
Fertiliser CBAM is harder to operationalise than other CBAM sectors because the compliance burden is distributed across a complex production chain that the EU importer cannot control. The importer did not design the monitoring system at the non-EU production installation, cannot restructure a third-country supplier's upstream ammonia supply chain, and cannot compel a producer to provide verified emissions data. The importer must nonetheless produce a declaration that is traceable, verified and defensible.
6.1 The Nitrogen Functional Unit: Why Fertiliser CBAM Is Operationally Different
FINDING: The Commission's Guidance No. 3 (14 August 2026) confirms that the functional unit for fertilisers is kg of nitrogen, not tonnes of finished product. A 1,000-tonne shipment of urea (approximately 46% N, yielding approximately 460 kg N per tonne — approximate industry reference; confirm from supplier product specification) carries a materially different CBAM profile from a 1,000-tonne shipment of CAN (approximately 27% N, approximately 270 kg N per tonne), even though both shipments weigh the same.
SO WHAT: A compliance team that calculates CBAM liability on a straight per-tonne-of-goods basis will misstate embedded emissions for every product in its portfolio — either overdeclaring and overpurchasing certificates, or underdeclaring and facing a surrender shortfall and penalty on 30 September 2027.
NOW WHAT: Update the internal CBAM liability model to apply the nitrogen-content percentage to every in-scope import line before 31 December 2026. Verify nitrogen content against the product specification sheet or analytical certificate from each supplier and retain both documents as part of the CBAM evidence file.
The functional-unit requirement also affects how competent authorities will assess a declaration under review. A declaration that reports embedded emissions on a per-tonne-of-goods basis, without evidence that the nitrogen-content conversion has been applied, will be technically deficient regardless of whether the underlying emissions data is accurate.
The practical check for compliance teams: take the import manifest for any 2026 nitrogen fertiliser shipment, identify the CN code, confirm the nitrogen content from the product specification, and calculate kg of N imported. That number is the denominator against which the verified or default emissions factor is applied.
6.2 Precursor Chain: When Ammonia and Nitric Acid Create a Data Trail Problem
FINDING: The Commission's Guidance No. 5c (14 August 2026) requires that where precursors — specifically ammonia and nitric acid — are produced at separate installations from the finished fertiliser, the embedded emissions from those precursor production processes must be attributed and documented as part of the total embedded-emissions calculation. CF Industries loaded 23,500 metric tonnes of certified low-carbon ammonia at Donaldsonville, Louisiana, on 25 September 2025 for shipment to Antwerp, explicitly linking the shipment to EU CBAM preparation — demonstrating that the precursor emissions chain is already being structured commercially.
SO WHAT: An importer who obtains emissions data only from the fertiliser granulation or blending plant — and not from the upstream ammonia or nitric acid production installation — will have an incomplete emissions record and cannot file a verifiable actual-value declaration, regardless of how detailed the granulation-plant data is.
NOW WHAT: Map the full production chain for every non-EU nitrogen fertiliser supplier: identify where ammonia and nitric acid are sourced, whether they come from the same installation as the finished fertiliser, and request installation-level emissions data from each upstream facility as part of the supplier data protocol by 31 October 2026.
The precursor data problem is inherent to how nitrogen fertilisers are manufactured. Consider a urea import from a facility in Egypt. The urea is granulated at installation A. The ammonia used was produced at installation B, owned by a different company, and purchased on the open market. For CBAM purposes, the embedded emissions in that urea include both the granulation emissions (installation A) and the ammonia production emissions (installation B). If installation B's operator declines to provide data, the actual-value pathway is closed for that product.
CF Industries' October 2025 low-carbon ammonia shipment to Antwerp illustrates that major suppliers are already operationalising the precursor data structure in anticipation of this requirement. VACI-certified ammonia with documented low-carbon credentials positions CF Industries' product as a lower-CBAM-cost input. For importers of finished fertiliser, the equivalent preparation involves auditing the entire precursor chain and building data-provision requirements into supplier contracts before the 2027 declaration cycle closes.
6.3 Industry Response: How the Fertiliser Market Is Already Adjusting
FINDING: Fertilizers Europe's May 2026 press release reported 2.37 million tonnes of nitrogen fertiliser imports into Europe in December 2025 alone — approximately 28% of annual European N-fertiliser consumption by its estimate — and estimated a CBAM-related price impact of approximately €45 per tonne of urea depending on emissions (company-sourced advocacy figures; source: Fertilizers Europe press release, 19 May 2026). Yara disclosed in March 2026 that European nitrogen prices are expected to carry an increasing premium over global nitrogen prices as CBAM costs phase in.
SO WHAT: Importers who have not built CBAM certificate costs into their 2027 fertiliser procurement pricing model risk margin erosion when the certificate cost becomes visible at declaration point in September 2027 — by which point supply contracts for 2027 may already be fixed.
NOW WHAT: Brief Finance and Procurement on the CBAM cost component before 31 October 2026 using the provisional certificate liability calculations from Section 5.1. Build an explicit CBAM cost-recovery line into 2027 supply pricing structures before contracts are finalised.
The market is repricing EU nitrogen imports structurally. European producers bear EU ETS costs; non-EU importers now bear CBAM costs on the same embedded carbon. Fertilizers Europe's advocacy — calling for CBAM to be strengthened and warning of competitiveness pressures — reflects a sector already experiencing the dynamic CBAM was designed to create.
The Fertilizers Europe estimate of €45/t on urea is a company-sourced advocacy figure, not a regulatory calculation. Actual certificate cost per tonne of finished product will vary by supplier, country and production route. It should be treated as a market-intelligence reference, not as a declaration input.
7. Practical Action Framework
The practical compliance programme for a nitrogen fertiliser importer runs across twelve months, spans five internal functions, and requires three non-negotiable commitments before the end of 2026 — supplier data engagement, verifier contracting, and certificate purchase planning. The 30 September 2027 declaration does not begin with data collection in 2027. It begins with supplier engagement, verifier contracting and certificate planning in the remaining months of 2026.
7.1 The 12-Month Compliance Programme: September 2026 to September 2027
The 30 September 2027 declaration and certificate surrender requires twelve months of structured preparation. The programme below converts that requirement into a month-by-month compliance schedule.
Table 9 — 12-Month Compliance Programme: September 2026 to September 2027
Period | Action | Owner | Input Required | Output / Evidence |
Sep 2026 | CN code audit: confirm all 2026 import lines against Annex I | Customs/Logistics | Import manifests; product specs | Confirmed in-scope product list |
Sep–Oct 2026 | Compare supplier emission intensity against country defaults from IR 2025/2621 | Compliance + Procurement | Default value tables; supplier product data | Actual-vs-default decision per supplier |
Oct 2026 | Map full precursor chain for each supplier; identify upstream ammonia and nitric acid sources | Compliance | Supplier production chain disclosure | Precursor chain map per supplier |
Oct 2026 | Brief Finance and Procurement; build provisional CBAM liability model | Finance/Treasury | Import volumes; emission intensity estimates | Provisional 2026 liability range |
30 Nov 2026 | Issue standardised supplier data request letters to all non-EU fertiliser producers | Procurement | Guidance No. 5c data field list | Supplier data request with response deadline |
Nov–Dec 2026 | Shortlist CBAM-accredited verifiers with fertiliser-sector competence | Compliance | CBAM Registry verifier list | Verifier shortlist |
31 Dec 2026 | Contract CBAM-accredited verifier for 2026-import verification | Compliance | Verifier engagement; supplier data status | Signed verifier engagement |
31 Dec 2026 | Build quarterly certificate purchase schedule; brief treasury | Finance/Treasury | Provisional emissions data | Certificate purchase plan for Q1–Q3 2027 |
31 Jan 2027 | Supplier data responses deadline; identify gaps; apply defaults where unresolved | Procurement + Compliance | Supplier responses | Complete or default-applied emissions dataset |
1 Feb 2027 | Certificate sales open — begin phased Q1 2027 purchases | Finance/Treasury | Provisional emissions data; purchase plan | First certificate purchases |
Q1–Q2 2027 | Verifier fieldwork; verification of actual-value emissions data | External verifier + Compliance | Complete emissions data; monitoring records | Draft verification report |
Q1–Q3 2027 | Quarterly certificate holding compliance checks (31 Mar, 30 Jun) | Finance/Treasury | Running import tally; cert holding position | Confirmed ≥50% holding at each quarter-end |
Q2 2027 | Declaration preparation; assemble embedded-emissions dataset by CN code | Compliance | Verified actual data or default values | Draft declaration dataset |
Jul–Aug 2027 | Final verification report; quality-check declaration dataset | Compliance + Verifier | Verification report | Finalised verified emissions data |
30 Sep 2027 | Submit annual CBAM declaration and surrender certificates in CBAM Registry | Compliance | Final declaration dataset; cert balance | Submitted declaration; certificates surrendered |
Three decision points in this programme carry the greatest downstream risk if delayed: the supplier data request deadline of 30 November 2026 (a late request compresses verification time and increases default-value fallback risk), the verifier contracting deadline of 31 December 2026 (late engagement risks inability to secure a qualified verifier in time), and the first certificate purchase window in February 2027 (delay triggers quarterly holding non-compliance by 31 March 2027).
7.2 Supplier Data Protocol: What to Request, From Whom and What to Do When It Is Not Provided
FINDING: The Commission's Guidance No. 5c (14 August 2026) specifies that actual-value declarations for fertilisers require installation-level monitoring data, production-process data and upstream precursor data from separate installations where applicable. Verification of actual values by an accredited CBAM verifier is required under the definitive regime before those values can be used in a declaration.
SO WHAT: Without a structured supplier engagement protocol, importers will receive inconsistent and incomplete data, will be unable to support actual-value claims at verification stage, and may face last-minute default-value fallbacks that increase certificate cost — particularly where their supplier's actual emissions are below the country-specific default value.
NOW WHAT: Issue standardised supplier data request letters to all non-EU nitrogen fertiliser producers by 30 November 2026, specifying the data fields in Table 4, the verification consent required and a supplier response deadline of 31 January 2027.
Tier 1 — Supplier provides complete data and consents to verification.
Proceed to verifier engagement with the complete dataset. Plan verification fieldwork for Q1–Q2 2027. This is the optimal outcome and should be the target for every key supplier.
Tier 2 — Supplier provides partial data.
Identify the specific missing data fields. Return with a targeted follow-up request. Set a final response deadline of no later than 28 February 2027. If gaps are unresolved by that date, apply default values for that supplier's products for the 2026 declaration and flag the gap in commercial negotiations for 2027 supply agreements.
Tier 3 — Supplier refuses or cannot produce installation-level monitoring data.
Apply default values from Implementing Regulation (EU) 2025/2621 for that supplier's country and product. Address data provision as a commercial condition in the next supply agreement renewal. Do not attempt to file an actual-value declaration for products from a supplier who has refused data access.
Tier 4 — Supplier provides data that cannot be independently verified.
Treat as Tier 3. Unverified actual data cannot support a definitive-regime actual-value declaration. Filing a declaration based on unverified actual values creates a technically deficient declaration and is worse than filing on defaults.
CBAM data-provision should be added as a contractual obligation in any supply agreement renewed or renegotiated before year-end 2026. The clause should specify: the data fields to be provided (cross-referenced to Table 4 of this report or Guidance No. 5c), the format and timing of provision, the obligation to allow CBAM verifier access to relevant data and records, and the consequence of non-provision.
7.3 Internal Ownership: Who Is Responsible for Each CBAM Obligation
CBAM compliance obligations span five internal functions. Without explicit ownership assignment, obligations fall into the gaps between teams — particularly the boundary between Compliance, Procurement and Finance.
Table 10 — Internal Ownership Map
CBAM Obligation | Compliance / Legal | Procurement | Finance / Treasury | Customs / Logistics | Sustainability | External |
Authorised declarant registration | Lead | — | — | Support | — | Legal counsel |
CN code audit | Support | — | — | Lead | — | — |
Actual vs default comparison | Lead | Support | Support | — | — | — |
Supplier data request | Support | Lead | — | — | Support | — |
Precursor chain mapping | Lead | Support | — | — | Support | — |
Verifier selection and contracting | Lead | — | Support | — | Support | Accredited verifier |
Certificate purchase schedule | Support | — | Lead | — | — | — |
Quarterly holding compliance | Lead | — | Lead | — | — | — |
Annual declaration preparation | Lead | — | Support | Support | Support | Verifier |
Certificate surrender | Lead | — | Lead | — | — | — |
Evidence file maintenance | Lead | Support | Support | Support | Support | — |
UK CBAM registration | Lead | — | — | — | — | Legal / Tax counsel |
7.4 Evidence Trail and Audit Readiness
FINDING: The Commission's verification guidance (24 August 2026) confirms that verifiers must review and attest to the completeness and accuracy of the emissions data and monitoring records underpinning an actual-value declaration. Article 5(6) of Regulation (EU) 2023/956 requires declarants to retain all records until the end of the fourth year after the declaration year — for 2026 imports declared in September 2027, records must be kept until end of 2031.
SO WHAT: An importer whose emissions evidence trail is incomplete when the verifier begins fieldwork in Q1–Q2 2027 cannot obtain a valid verification report — the declaration reverts to default values or, if the importer proceeds without verification, is technically deficient and fully exposed to competent authority challenge.
NOW WHAT: Establish a CBAM evidence file for each non-EU nitrogen fertiliser supplier before 31 January 2027, containing all data from the supplier data protocol, verification correspondence, the signed verifier engagement confirmation, and any default-value documentation where actual values are not available.
Table 11 — Evidence Hierarchy
Document | Status | Retention Period | Risk If Absent |
Import records (quantity, CN code, country of origin) | Legally required | Until end of 2031 (Art. 5(6)) | Declaration cannot be built; competent authority cannot verify scope |
CN-code product specification / analytical certificate | Legally required | Until end of 2031 | Nitrogen content cannot be confirmed; functional unit calculation unverifiable |
Supplier installation-level monitoring data | Legally required (actual values) | Until end of 2031 | Actual-value declaration unverifiable; forced onto default values |
Precursor installation data (where applicable) | Legally required (actual values) | Until end of 2031 | Embedded emissions calculation incomplete; declaration deficient |
Verification report from accredited CBAM verifier | Legally required (actual values) | Until end of 2031 | Actual-value declaration cannot be filed; default values required |
Certificate purchase records | Legally required | Until end of 2031 | Quarterly holding compliance cannot be demonstrated |
CBAM Registry correspondence and submission records | Legally required | Until end of 2031 | No audit trail of declaration and surrender |
Supplier data request letters and responses | Strongly recommended | Until end of 2031 | Demonstrates due diligence if default values applied |
Precursor chain mapping documentation | Strongly recommended | Until end of 2031 | Shows systematic approach to embedded-emissions attribution |
CBAM data-provision clauses in supply contracts | Strongly recommended | Duration of contract + 4 years | Evidences contractual framework for ongoing data provision |
Carbon price deduction documentation | Required if deduction claimed | Until end of 2031 | Deduction reversed on review if unsupported |
Country-default value applied (with source IR citation) | Required if default values used | Until end of 2031 | Default-value declaration cannot be reconciled without source reference |
8. Strategic Outlook
The first annual declaration cycle, culminating in September 2027, is the start of an ongoing compliance programme, not a one-time exercise. Understanding where CBAM goes after the first cycle — and how EU and UK obligations interact over the medium term — is essential for the compliance teams and supply chain directors who must plan beyond a single declaration date.
8.1 EU CBAM vs UK CBAM: The Dual-Regime Comparison
FINDING: UK CBAM begins 1 January 2027 under Finance Act 2026, Part 5. Its financial mechanism — embodied emissions × UK CBAM rate − Carbon Price Relief under S.I. 2026/809 — is structurally distinct from EU CBAM's certificate purchase and surrender mechanism. The £50,000 registration threshold and HMRC registration requirement apply from the UK CBAM start date. Electricity is not included in the UK CBAM's initial sector scope — a critical divergence from EU CBAM, which has covered electricity since 2026.
SO WHAT: An importer who assumes that obtaining authorised EU CBAM declarant status and filing an EU CBAM declaration automatically satisfies UK CBAM obligations is incorrect on every element — mechanism, registration threshold, financial calculation and filing deadline.
NOW WHAT: Map UK CBAM registration obligations under HMRC guidance (updated 16 July 2026) before the end of 2026, applying both the forward-looking 30-day test and backward-looking 12-month test. The UK CBAM compliance programme must run in parallel with, not subordinate to, the EU CBAM programme from January 2027.
Supplier emissions data collected for EU CBAM does not automatically satisfy UK CBAM — the two mechanisms treat precursor emissions differently, require separate registration processes, and calculate financial obligations under distinct frameworks. An importer should not assume that a verification report prepared for EU CBAM purposes will satisfy a future UK CBAM verification requirement for the same product.
The filing and payment structures are entirely separate. The EU declaration and surrender deadline is 30 September of each year for the prior year's imports. The UK CBAM return and payment deadline is 31 May of each year for the prior year's imports. The two deadlines do not coincide and require independent preparation.
8.2 After September 2027: What Comes Next in the CBAM Cycle
FINDING: For fertilisers, the default-value mark-up under Implementing Regulation (EU) 2025/2621 is 1% throughout all years — a flat rate that reflects food security policy in Regulation (EU) 2025/2083 and contrasts with the escalating 10%–20%–30% mark-up that applies to other CBAM sectors such as steel, aluminium and cement. The financial incentive for fertiliser importers to move from default to actual values derives from the difference between the country-specific default emission intensity and the specific supplier's actual intensity — not from an escalating statutory penalty.
SO WHAT: For fertiliser importers, the decision to invest in actual-value reporting infrastructure is a supplier-specific financial calculation — it is economically compelling when the supplier's actual emission intensity is materially below the country default (making actual values cheaper), but the urgency is lower than for sectors facing a 30% mark-up by 2028.
NOW WHAT: Prioritise actual-value reporting for high-volume, long-term supplier relationships where actual emission intensity is expected to fall materially below the country default in Implementing Regulation (EU) 2025/2621 — formalise that assessment for every key supplier before 30 September 2027, when the first declaration cycle closes.
The 2027 annual declaration cycle — covering 2027 imports, due 30 September 2028 under the same annual structure established by Regulation (EU) 2023/956, Article 6 — will follow the same structure as the 2026 cycle. Importers who have successfully operationalised the supplier data protocol, verifier engagement and certificate management programme for 2026 will have the infrastructure in place to repeat it more efficiently.
The premium Yara identifies between EU and global nitrogen prices will widen as CBAM certificate costs accumulate across successive declaration cycles. Importers whose supply chains feature low-carbon producers with verified emission data will face lower CBAM costs and hold a structural pricing advantage over importers relying on high-default-value suppliers.
The Compliance Manager's decisive actions before 31 December 2026 — supplier data requests issued, verifier contracted, certificate purchase schedule in treasury planning — determine not only whether the first declaration is filed correctly on 30 September 2027, but whether each subsequent cycle runs with lower cost and higher supplier data quality. That is the commercial case for acting now.
9. Frequently Asked Questions
Which fertiliser products are subject to EU CBAM in 2026, and which CN codes are covered?
Nitrogen-containing fertilisers and fertiliser precursors listed in Annex I of Regulation (EU) 2023/956 are in scope. The covered product families are ammonia (CN 2814 10 00 and 2814 20 00), nitric acid and sulphonitric acids (CN 2808 00 00), potassium nitrate (CN 2834 21 00), the entire CN 3102 heading (all nitrogenous fertilisers, including urea, ammonium nitrate, ammonium sulphate, sodium nitrate and CAN), and CN 3105 (multi-nutrient fertilisers containing nitrogen), with the explicit exclusion of CN 3105 60 00 (phosphorus-potassium only). The 50-tonne annual net-mass threshold under Regulation (EU) 2025/2083 applies in aggregate across all in-scope CBAM goods — not per CN code.
How are embedded emissions calculated for nitrogen fertilisers under EU CBAM?
Embedded emissions for fertilisers are expressed per kg of nitrogen, not per tonne of finished product, as confirmed by Guidance No. 3 and No. 5c (both published 14 August 2026). The importer must know the nitrogen content of each product, convert the imported quantity to kg of nitrogen, and apply the applicable emissions factor (actual verified or country-specific default from Implementing Regulation (EU) 2025/2621) to that kg-N figure. Where ammonia or nitric acid is produced at a separate installation from the finished fertiliser, those precursor production emissions must be attributed and added to the total.
What emissions data must we obtain from a non-EU fertiliser producer for EU CBAM?
For an actual-value declaration under the definitive regime, Guidance No. 5c (14 August 2026) requires: installation identification (name, location, operator); the monitoring methodology or monitoring plan applied; direct embedded emissions from the production process expressed per kg of nitrogen; production volume data for the monitoring period; upstream precursor emissions data where ammonia or nitric acid comes from a separate installation; and verification consent allowing an accredited CBAM verifier access to review the data. Default values apply where this data cannot be obtained — the nitrogen content of the product is still required to apply the default correctly.
Should we use EU CBAM default values or obtain actual verified emissions from our supplier?
For fertilisers, the default-value mark-up is 1% — not the 10%–30% escalating schedule that applies to other sectors. The financial case for actual values therefore depends on whether your supplier's actual emission intensity is meaningfully below their country's default value in Implementing Regulation (EU) 2025/2621. Where a high-efficiency supplier has actual emissions significantly below the country average, actual values produce lower certificate cost. Where the country default is already moderate and the supplier data collection effort is costly, default values may be operationally rational.
When must EU fertiliser importers complete each step before the 30 September 2027 declaration deadline?
Supplier data requests should be issued by 30 November 2026, with responses expected by 31 January 2027. Verifiers should be contracted by 31 December 2026, with fieldwork planned for Q1–Q2 2027. Certificate sales open on 1 February 2027 — phased purchases must begin immediately to meet the 50% quarterly holding requirement at 31 March 2027. The declaration dataset should be finalised by August 2027, with the annual declaration and certificate surrender submitted before 30 September 2027.
How does EU CBAM differ from UK CBAM for fertiliser importers, and can the same supplier data be used for both?
EU CBAM requires authorised declarant status, annual declaration and certificate surrender — administered through the EU CBAM Registry under Regulation (EU) 2023/956. UK CBAM is an HMRC-administered tax charge under Finance Act 2026, Part 5: embodied emissions × UK CBAM rate − Carbon Price Relief, with a £50,000 registration threshold and a first return deadline of 31 May 2028 for 2027 imports. Supplier nitrogen-content data and production-process information can partially serve both regimes, but the two methodologies differ in their treatment of precursor emissions and have separate verification frameworks. Parallel compliance programmes are required — EU CBAM compliance does not satisfy UK CBAM and vice versa.
10. References and Sources
European Commission / DG TAXUD — CBAM Definitive Regime. Date: Current 2026. URL: taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-definitive-regime_en
European Commission / DG TAXUD — CBAM Questions and Answers. Date: 27 May 2026. URL: taxation-customs.ec.europa.eu/document/download/013fa763-5dce-4726-a204-69fec04d5ce2_en
European Commission / DG TAXUD — Guidance No. 3 — CBAM methods for calculation of emissions embedded in goods. Date: 14 August 2026. URL: taxation-customs.ec.europa.eu/system/files/2026-08/Guidance%20No.%203%20-%20CBAM%20methods%20for%20the%20calculation%20of%20emissions%20embedded%20in%20goods.pdf
European Commission / DG TAXUD — Guidance No. 5c — Sector-specific guidance on fertilisers. Date: 14 August 2026. URL: taxation-customs.ec.europa.eu/document/download/8fd0542b-e67d-4183-bb20-a19de510f53c_en
European Commission / DG TAXUD — CBAM Legislation and Guidance. Date: 24 August 2026. URL: taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-legislation-and-guidance_en
European Commission — Price of CBAM Certificates. Date: 2026. URL: taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/price-cbam-certificates_en
European Commission — Regulation (EU) 2023/956. Date: 10 May 2023, consolidated 20 October 2025. URL: eur-lex.europa.eu/eli/reg/2023/956/2025-10-20/eng
European Parliament and Council — Regulation (EU) 2025/2083. Date: 8 October 2025. URL: eur-lex.europa.eu/eli/reg/2025/2083/oj/eng
European Commission — Implementing Regulation (EU) 2025/2621. Date: 16 December 2025. URL: eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202502621
European Commission — Implementing Regulation (EU) 2026/1740. Date: 10 August 2026. URL: eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32026R1740
European Commission — Implementing Regulation (EU) 2025/2547. Date: December 2025. URL: eur-lex.europa.eu
European Commission — Implementing Regulation (EU) 2025/2548. Date: December 2025. URL: eur-lex.europa.eu
European Commission — Delegated Regulation (EU) 2025/2551. Date: December 2025. URL: eur-lex.europa.eu
European Commission — CBAM successfully entered force. Date: 14 January 2026. URL: taxation-customs.ec.europa.eu/news/cbam-successfully-entered-force-1-january-2026-2026-01-14_en
HMRC — Prepare for UK CBAM. Date: Updated 16 July 2026. URL: gov.uk/government/collections/carbon-border-adjustment-mechanism
HMRC — CBAM Policy Summary. Date: 10 February 2026. URL: gov.uk/government/publications/carbon-border-adjustment-mechanism-cbam-policy-summary
HMRC — CBAM Registration Threshold Guidance. Date: 16 July 2026. URL: gov.uk/guidance/work-out-the-date-youll-need-to-register-for-carbon-border-adjustment-mechanism-cbam
UK Parliament — Finance Act 2026, Part 5. Date: 2026. URL: legislation.gov.uk/ukpga/2026/11/part/5
UK Legislation — S.I. 2026/809 — CBAM Rate and Carbon Price Relief Regulations. Date: 13 July 2026. URL: legislation.gov.uk/uksi/2026/809/contents/made
Yara — Pre-quarter Information, Sensitivities and Capacities. Date: 19 March 2026. URL: yara.com/investor-relations/analyst-information/sensitivities
OCI Global — Q1 2024 Results. Date: 14 May 2024. URL: oci-global.com/news-stories/press-releases/oci-global-reports-q1-2024-results
CF Industries — Certified Low-Carbon Ammonia Shipment Announcement. Date: 2 October 2025. URL: ir.cfindustries.com/Investors/news/news-details/2025/CF-Industries-Trafigura-and-Envalior-Announce-Shipment-of-Certified-Low-Carbon-Ammonia
Fertilizers Europe — Fertilizer Action Plan: Recognition Must Now Translate into Delivery. Date: 19 May 2026. URL: fertilizerseurope.com/wp-content/uploads/2026/05/Fertilizers-Europe_Press-Release_Fertiliser-Action-Plan_-1.pdf
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