The submission window for the final reporting cycle of the EU Carbon Border Adjustment Mechanism (CBAM) transition period is approaching its close. This marks the last practical rehearsal before CBAM officially enters the “taxation and compliance” phase, with direct implications for overseas companies’ EU market access and carbon cost management in 2026.
From 1 January 2026, CBAM will move beyond reporting obligations to impose actual financial liabilities through carbon tariffs. Failing to complete this final transition-period reporting may create hidden compliance risks, affecting future declarations, verification outcomes, and cost control under the full implementation phase.

The core value of the final transition-period reporting lies in enabling companies to adapt in advance to the stricter rules of the full CBAM regime. Key differences between the two phases are reflected in four major aspects:

Core Requirements
During the transition period, companies are only required to submit quarterly emissions reports, with no payment obligation. In the full implementation phase, companies must surrender CBAM certificates and pay carbon tariffs, while free allowances under the EU ETS will be gradually reduced year by year.
Nature of Responsibility
The transition period focuses solely on information disclosure. Under full implementation, companies will bear dual responsibilities: emissions reporting and financial compliance.
Verification Requirements
Third-party verification remains voluntary during the transition period. From 2026 onward, mandatory third-party verification will be required for CBAM declarations.
Penalty Mechanism
Non-compliance during the transition period typically results in report rejection and rectification. Under the full regime, violations may lead to substantial fines and, in severe cases, restrictions on access to the EU market.

It is also important to note that the EU has assigned relatively high default emission values to products from certain regions. These default values may result in significantly higher carbon costs, and CBAM tariff rates are expected to increase annually over the next three years.

This final reporting cycle therefore represents a critical opportunity for companies to clarify data boundaries, validate calculation methodologies, and close compliance gaps—ensuring cost control and operational stability once CBAM enters the taxation phase.

For the final reporting cycle of the transition period, the EU has clearly defined key reporting expectations. Companies should focus on the following three actions to ensure full compliance:

1. Accurately Confirm Product Scope
CBAM reporting continues to cover six product categories: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. Companies must carefully verify all relevant customs codes to avoid invalid submissions caused by missing or misclassified products.:

2. Strengthen Data Traceability
Companies should comprehensively organize both direct and indirect emission data, and retain supporting documentation such as production records, energy consumption data, and supply-chain emission evidence. These materials will form the basis for mandatory third-party verification in the full implementation phase.

3. Coordinate Closely with EU Importers
Even when companies are not the direct declarants, they must promptly provide emission data and carbon cost information to EU-authorized importers. Effective data coordination is essential to ensure smooth customs clearance and prevent trade disruptions caused by information gaps.

CBAM reporting involves multiple complexities, including regulatory interpretation, emissions calculation, and report preparation. Companies managing the process independently may face risks such as data inconsistencies, calculation errors, or missed reporting requirements.
As a professional service provider specializing in CBAM compliance, SKYCO2 has established a dedicated reporting support team to deliver end-to-end assistance, including:
● Comprehensive Reporting Support
From data consolidation and report drafting to pre-submission validation, ensuring full alignment with EU reporting formats and requirements.
● Regulatory and Data Guidance
Interpretation of the latest EU CBAM methodologies, guidance on the application of default emission values, and standardization of emissions calculation processes.
● Rapid Response to Urgent Issues
Real-time consulting support to address unexpected challenges during the reporting process and prevent submission delays.

The year 2026 will be a decisive milestone for global green trade compliance. The final CBAM transition-period reporting represents the last opportunity for companies to prepare under real regulatory conditions before financial obligations fully apply.
By seizing this critical window and strengthening compliance foundations in advance, companies can mitigate carbon cost risks and secure long-term access to the EU market.
If you are facing challenges related to emissions data, regulatory interpretation, or CBAM reporting, SKYCO2 is ready to support you with professional, efficient, and reliable compliance services—helping you complete the final transition reporting and build a solid foundation for the 2026 compliance phase.