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      The EU Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on 1 January 2026. Importers of cement, iron and steel, aluminium, fertilisers, hydrogen and electricity now carry a real carbon cost at the EU border.

      As part of the European Commission's ongoing review, the mechanism is expected to extend well beyond raw materials, with a first major expansion proposed for 1 January 2028 covering steel- and aluminium-intensive goods such as machinery, components and finished products.

      For Swiss companies, the picture is often misunderstood. Goods of Swiss origin are excluded from CBAM because the Swiss emissions trading system is linked to the EU ETS.

      But that exclusion is narrower than many assume: it attaches to the origin of the goods, not to the nationality of the company.

      Swiss groups importing CBAM goods into the EU, directly or through their European entities, are fully in scope. Swiss companies may also be affected when supplying CBAM-covered goods to EU customers, and Swiss manufacturers of downstream goods will increasingly be drawn in if the expansion is adopted.

      This page explains how CBAM works, who it affects in Switzerland, what it entails in compliance and financial terms, what happens if you get it wrong, and what companies should be doing now.

      Elizabeth Barendregt
      Elizabeth Barendregt

      Partner, Indirect Tax & ESG

      KPMG Switzerland

      Manfredi Fiorillo
      Manfredi Fiorillo

      Senior Manager, Sustainability & Climate Advisory

      KPMG Switzerland

      Explore our services
      Download the factsheet

      CBAM Factsheet

      Scope, impact and the proposed 2028 expansion — what Swiss companies need to know.

      Download the factsheet

      What is CBAM and how does it work?

      CBAM places a carbon price on selected goods imported into the EU customs territory, matching the price EU producers pay for emissions allowances under the EU Emissions Trading System (EU ETS).

      Its purpose is to prevent carbon leakage — production and emissions relocating to jurisdictions with weaker climate policy — as the EU withdraws the free allowances that have shielded its emissions-intensive industry.

      The mechanism is set out in Regulation (EU) 2023/956, amended by the CBAM simplification regulation (EU) 2025/2083, in force since 20 October 2025.

      In practice it operates through three core obligations:

      Authorisation: Imports of CBAM-covered goods above the applicable threshold may only be performed by an authorised CBAM declarant, who must be established in an EU Member State. Where the importer is not, the indirect customs representative takes on the role and the related obligations.

      Declaration: The declarant must report the greenhouse gas emissions embedded in the imported goods, based on emissions data obtained from suppliers and verified where required.

      Surrender: The declarant must purchase and surrender CBAM certificates matching those embedded emissions, less any carbon price already paid in the country of production.

      The dates that matter

      • 1 January 2026

        Definitive phase begins. Financial obligations start to accrue on imports.

      • 30 September 2027

        First annual CBAM declaration and certificate surrender, covering 2026 imports.

      • 1 February 2027

        CBAM certificate sales open.

      • 1 January 2028

        Proposed expansion to downstream products would take effect, subject to adoption.

      • From 2027, each quarter end

        Declarants must hold certificates covering at least 50% of emissions accrued since the start of the year.

      • 2034

        CBAM factor reaches 100%.

      Which goods are in scope today?

      CBAM currently covers raw materials and specified goods in six sectors: cement, iron and steel, aluminium, fertilisers, hydrogen and electricity.

      Scope is defined by CN customs code (Combined Nomenclature code) in Annex I to the CBAM Regulation, not by product description. Certain precursors and a limited set of downstream goods are already included.

      A de minimis threshold of 50 tons of CBAM goods per importer per calendar year applies. Below this threshold, no reporting, declaration or surrender obligation arises. The threshold does not apply to hydrogen or electricity.

      The European Commission estimates that this exempts roughly 90% of importers while still capturing around 99% of the embedded emissions concerned — which tells you where the burden sits: with a relatively small number of large importers.

      Scope is a customs question before it is a sustainability question.

      Whether a product falls within CBAM depends on its CN code and its non-preferential origin, both of which sit with customs, trade compliance and logistics teams rather than with sustainability functions.

      Errors in classification or origin determination can create CBAM exposure regardless of how accurately emissions data has been calculated.

      Who is affected in Switzerland?

      Switzerland holds a unique position: because the Swiss ETS is linked to the EU ETS, goods with non-preferential Swiss origin are excluded from the mechanism when imported into the EU. Many Swiss companies are nevertheless affected, in three ways.

      apartment

      Swiss groups importing into the EU through their EU entities

      A Swiss-headquartered group importing Chinese, Indian or Turkish steel, aluminium or fertiliser through its German, Dutch or Italian subsidiary is in scope like any EU company.

      The obligation lies with the EU importing entity, but supplier relationships, procurement decisions and emissions data are usually managed from Switzerland.

      That split between where the obligation lands and where the data sits is a common challenge.
       

      local_shipping

      Swiss companies selling into the EU on delivered terms

      A Swiss company without an EU establishment selling CBAM goods on DDP (Delivered Duty Paid) terms cannot itself become an Authorised CBAM Declarant.

      The obligation falls to the indirect customs representative, who must accept the responsibility and will reflect that risk in pricing and commercial terms, or may decline it altogether.

      Access to customs representation should therefore be treated as a commercial consideration, not an administrative formality.

      electric_bolt

      Swiss traders and utilities with electricity and hydrogen flows into the EU

      Electricity and hydrogen sit outside the 50 ton de minimis exemption introduced by the Omnibus, so every unit imported is in scope from the first megawatt hour or kilogram, regardless of volume. Exposure follows the origin of the power or hydrogen, not the location of the trader.

      For electricity there is a further point that is easily missed: because EU electricity generation receives no free allocation under the EU ETS, there is no free allocation adjustment, so imported electricity carries its full CBAM liability from 2026 rather than benefiting from the phase-in that softens exposure in the other sectors.

      The route to actual emissions is also narrow, requiring evidence of physical delivery, so country-specific default values based on fossil generation will apply in most cases.

      factory

      Swiss manufacturers and exporters of downstream products, from 2028

      If the proposed expansion is adopted, Swiss manufacturers of machinery, components and equipment with a high content of third-country steel or aluminium will face CBAM questions in their supply chain.

      EU customers will seek information on embedded emissions, material sourcing and the origin of steel and aluminium inputs.

      Companies that never considered themselves CBAM-relevant will likely receive their first data request from a customer rather than from a regulator.




       


      A note on origin.       One of the most frequent areas of confusion concerns origin. The CBAM exclusion depends on demonstrating non-preferential Swiss origin, which is not the same test as preferential origin under a free trade agreement.

      Goods processed into finished goods in Switzerland from imported material may not qualify under the non-preferential origin rules. This requires careful assessment case by case.

      What does CBAM cost — and why 2026 understates it?

      The Commission has published the first two quarterly CBAM certificate prices: EUR 75.36 per ton of CO₂e for Q1 2026 and EUR 75.28 for Q2 2026, calculated as the weighted average of EU ETS auction clearing prices. Prices are quarterly in 2026 and move to a weekly basis from 2027.

      The headline price is not the final cost. Two other factors are a significant part of the equation.

      The CBAM factor

      In 2026, certificates are required for only 2.5% of the embedded emissions in imported goods, mirroring the free allocation still granted to EU producers.

      That share rises each year until it reaches 100% in 2034, with the steepest single step between 2029 and 2030.

      As a result, a cost calculation built on 2026 will materially understate the exposure that arrives at the end of the decade — precisely the period in which procurement and supplier decisions taken today will still be in force.

       

      Default values versus actual emissions data

      The second major cost driver is the quality of emissions data obtained from suppliers. Where verified supplier data is unavailable, default emission values apply, and they are materially higher. The gap between actual and default figures is frequently the largest single variable in a CBAM cost model — and it is entirely within a company's control through supplier engagement.

      For many importers, the opportunity to mitigate financial exposure lies not in price forecasting but in supply chain and procurement management: securing robust, verified emissions data from suppliers, and factoring carbon intensity into sourcing decisions.

      What are the penalties for non-compliance?

      Penalties under CBAM are additional to the certificates owed, not a substitute for them. Paying a penalty does not discharge the underlying surrender obligation.

      • Surrendering fewer certificates than declared emissions require

        EUR 100 per ton of CO₂e not covered, indexed to European inflation. The declarant remains liable for the missing certificates.

      • Importing in-scope goods above the threshold without authorised declarant status

        Three to five times the standard rate, under the amended Article 26.

      • Errors attributable to data provided by third parties

        A reduced penalty is possible, recognising that declarants depend on supplier information they do not control. This is not automatic and has to be evidenced.


      The last point is an argument for documenting supplier data requests and responses from the outset, rather than from the moment a problem appears.

      What changes with the proposed 2028 expansion?

      In December 2025 the European Commission proposed extending CBAM to downstream products, strengthening anti-circumvention rules, adapting the treatment of electricity imports and establishing a temporary fund to support EU producers of CBAM goods.

      The proposal addresses a growing concern that carbon leakage can simply move further down the value chain if downstream products remain outside the mechanism.

      On 12 June 2026 the Council agreed its general approach, advocating a wider scope than originally proposed.

      • The Commission proposal would add around 180 steel- and aluminium-intensive downstream products from 1 January 2028: fabricated metals, machinery and industrial equipment, vehicle components, domestic appliances and construction equipment.

      • The Council added roughly 200 further metal-intensive industrial, construction and electrical goods, including forklifts, conveyor machinery and electric motor components.

      • The Council also proposed an annual review, obliging the Commission from 2028 to report each year on further downstream products that could be brought into scope.

      What happens next

      The proposal follows the ordinary legislative procedure.

      Final scope, product coverage and implementation rules remain subject to negotiation between Commission, Council and Parliament. 

      • European Parliament position: the lead committee held an indicative vote in July 2026; adoption in plenary is expected in September 2026.

      • Trilogue negotiations then reconcile the two positions, including the final product list. 

      • Formal adoption and publication in the Official Journal, expected late 2026 or early 2027.

      • Implementing and delegated acts setting out detailed rules for the new product categories. 

      • Application from 1 January 2028, as currently proposed.

      How to read this

      The product lists are proposals and the final scope may differ. What is not in doubt is the direction. CBAM is moving from a mechanism focused on raw materials into a value-chain instrument, and the Council's proposed annual review would make further expansion a recurring event rather than a one-off.

      Companies that conclude they are out of scope on the basis of the current six sectors should plan to revisit that conclusion at least annually.

      Will Switzerland introduce its own CBAM?

      This is an open question and an active political process.

      In its 2023 report responding to Postulate 20.3933, the Federal Council recommended against introducing a Swiss CBAM at that time, citing regulatory and trade policy risks and limited benefit to the wider economy.

      It committed instead to keeping the Swiss ETS aligned with the EU ETS, so that the linkage — and with it the exclusion of Swiss-origin goods from the EU mechanism — is preserved.

      It also foresaw re-examining the question once an interim picture of the EU system became available.

      In parallel, a parliamentary initiative on a carbon border adjustment for cement imports has been progressing, with a consultation on the draft held in early 2026.

      The proposal addresses the risk that higher Swiss carbon costs could place domestic cement producers at a competitive disadvantage against imports from jurisdictions with lower or no carbon pricing. Goods originating in the EU and EFTA states would be excluded.

      Both processes are ongoing and no final position has been published.

      In the meantime, two points deserve attention: trade deflection — carbon-intensive goods displaced from the EU market being redirected to Switzerland — is a live commercial issue for domestic producers, and the possibility of a sector-specific Swiss mechanism belongs on the risk register of anyone importing cement or clinker into Switzerland.
       

      International reach of CBAM

      Carbon border measures extend beyond Switzerland and the EU. A number of other jurisdictions are exploring or beginning to implement their own mechanisms; the United Kingdom currently plans to introduce a CBAM from 2027. Businesses with cross-border supply chains should monitor carbon taxation developments across all the markets they operate in.

      Key challenges for Swiss companies

      • Supplier emissions data

        Obtaining verified installation-level data from non-EU suppliers is the single most common bottleneck. Suppliers often lack the systems, and sometimes the willingness, to provide such data. Falling back on default values is permitted but more expensive.

      • Contracts and cost pass-through

        Existing supply contracts frequently allocate CBAM cost by silence. Whether the cost can be passed to customers, and who bears the risk of a supplier failing to provide data, is a commercial question that should not be resolved for the first time in September 2027. 

      • Fragmented ownership

        CBAM sits across customs, tax, procurement, finance and sustainability. In most organisations no single function owns it, and the gaps appear at the handovers: between the CN code assigned at import and the emissions data held by procurement.

      • Declarant status and EU footprint

        Groups that have restructured their EU import flows, or that rely on indirect customs representatives, may find the entity carrying the obligation is not the entity that controls the data.

      • Accounting and tax treatment

        CBAM certificates are non-tradable and purchasable only from the competent authority, which distinguishes them from ETS allowances and makes the IFRS analysis less straightforward than an analogy to emissions trading suggests. Deductibility and transfer pricing treatment also warrant early attention.

      What to do now

      • Map your flows

        Identify every EU import of in-scope goods across all group entities, by CN code and non-preferential origin — including flows you do not think of as imports.

      • Model the cost curve

        Build the exposure not only for 2026 but for 2030 and 2034, when the CBAM factor rises steeply, and use it to inform sourcing and pricing decisions today.

      • Confirm declarant status

        Verify that the correct entity holds, or has applied for, authorised CBAM declarant status, and that indirect customs representative arrangements are documented.

      • Screen against the proposed 2028 scope

        Test your product portfolio against the downstream product lists now, and re-screen once the Parliament's position is adopted.

      • Close the data gap

        Prioritise suppliers by volume and by the gap between actual and default emission values, and start collecting verifiable data now rather than in the surrender year.

      • Assign ownership

        Put one accountable owner in place, with a defined interface to customs, procurement, tax and sustainability.

      How KPMG supports you

      CBAM sits between customs, tax, finance and sustainability, and rarely fits neatly into any one of them.

      We work across those functions, from a first assessment of whether you are affected through to implementation and verification.

      Discover our CBAM services
      Download the factsheet

      CBAM Factsheet

      Scope, impact and the proposed 2028 expansion — what Swiss companies need to know.

      Download the factsheet
      • Strategic assessment

        For companies new to CBAM, and for sectors that would be drawn in by the proposed 2028 expansion. We determine whether and to what extent you are affected, through impact assessment sessions, an economic impact calculation and a retro-planning exercise that works back from the deadlines that matter to you.

      • Implementation and verification

        End-to-end CBAM integration across emissions calculation, compliance, governance and supporting technology. Verification of manufacturer emissions is available through KPMG Cert, the accredited certification and verification body of KPMG AG, operating independently.

      • CBAM governance

        A health check of your existing CBAM compliance processes, a gap analysis against the target state, and the design of governance covering compliance, measurement and verification — so that responsibility is assigned before the first surrender falls due.

      • Financial impact assessment

        Financial simulations based on your own trade data, using our CBAM trade data tool, focused on the levers that actually move the number: actual versus default emission values, and the timing of certificate purchase and repurchase cycles.

      • Accounting advisory

        Support on the accounting and disclosure treatment of CBAM certificates and the related cost, including the classification questions arising from their non-tradable nature, and the interaction with tax.

      FAQ

      CBAM is an EU instrument that places a carbon price on selected imported goods, equivalent to the price EU producers pay under the EU Emissions Trading System.

      It is designed to prevent carbon leakage as free ETS allowances are phased out, and has applied in its definitive form since 1 January 2026.

      Cement, iron and steel, aluminium, fertilisers, hydrogen and electricity, together with certain precursors and downstream goods.

      Coverage is defined by CN customs code, so classification determines scope.

      Goods of Swiss non-preferential origin are excluded from CBAM, because the Swiss emissions trading system is linked to the EU ETS.

      Swiss companies are nevertheless affected when they import third-country goods into the EU through EU entities, when they sell into the EU on delivered terms, and — if the proposed expansion is adopted — when their EU customers are caught on downstream goods.

      Importers established in an EU Member State whose annual imports of CBAM goods exceed 50 tonnes, or their indirect customs representatives.

      The threshold does not apply to hydrogen or electricity.

      CBAM certificate sales open on 1 February 2027.

      The first annual declaration and certificate surrender, covering goods imported during 2026, must be completed by 30 September 2027.

      The price tracks EU ETS auction clearing prices. For 2026 it is set quarterly: EUR 75.36 per tonne of CO₂e in Q1 2026 and EUR 75.28 in Q2 2026.

      From 2027 the price is published weekly. In 2026, certificates are required for only 2.5% of embedded emissions, rising annually to 100% in 2034.

      An authorised declarant that surrenders too few certificates faces a penalty of EUR 100 per tonne of CO₂e not covered, indexed to inflation, and still owes the missing certificates.

      Importing above the threshold without authorised declarant status attracts three to five times that rate. Reduced penalties are possible where errors stem from third-party data.

      The Commission proposed in December 2025 to extend CBAM to around 180 steel- and aluminium-intensive downstream products from 1 January 2028, alongside anti-circumvention measures.

      The Council agreed its position on 12 June 2026 and proposed adding roughly 200 further goods. The European Parliament is expected to adopt its position in September 2026, after which trilogue negotiations begin.

      The final list is not yet fixed.

      No decision has been taken yet. The Federal Council recommended against it in 2023 and committed to keeping the Swiss ETS aligned with the EU system, while foreseeing a later re-examination.

      A parliamentary initiative on a border adjustment for cement imports is currently in progress.

      CBAM: turn a compliance obligation into a cost you can manage

      CBAM cuts across customs, tax, procurement and sustainability.

      We help you determine where you are in scope, secure the supplier data that drives your cost, and build a process that holds up when the first surrender falls due on 30 September 2027.

      Talk to our CBAM specialists

      Meet our experts

      Elizabeth Barendregt
      Elizabeth Barendregt

      Partner, Indirect Tax & ESG

      KPMG Switzerland

      Silvan Jurt
      Silvan Jurt

      Partner, Head Corporate Sustainability Services

      KPMG Switzerland

      Manfredi Fiorillo
      Manfredi Fiorillo

      Senior Manager, Sustainability & Climate Advisory

      KPMG Switzerland

      Konstantina Tsiosta
      Konstantina Tsiosta

      Senior Manager, Indirect Tax

      KPMG Switzerland

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