CBAM Fines and Non-Compliance: Transitional Reporting Penalties versus Definitive-Period Sanctions
There are two sets of CBAM sanctions, and which one applies depends on the period. For quarterly reports in the transitional period (October 2023 to December 2025), the penalty was EUR 10 to EUR 50 per tonne of unreported emissions. In the definitive period (from 1 January 2026), an authorised declarant that has not surrendered enough certificates by 30 September pays, for each missing certificate, a penalty equal to the EU ETS excess emissions penalty, and still owes the certificates. Importing without authorisation is penalised at three to five times that rate.
Who is exposed, and why it matters to UK firms
Sanctions fall on the party responsible in the EU: the reporting declarant during the transitional period, and the authorised CBAM declarant, or an unauthorised importer, during the definitive period. A UK manufacturer is not directly penalised. Your exposure is indirect but real: under Article 26(1a), a declarant's penalty may be reduced when its shortfall came from incorrect information supplied by an operator, a verifier or a carbon-price certifier. In other words, the regulation expressly anticipates supplier errors. If your group has an EU importing subsidiary, that company carries the risk directly.
The rules below come from Implementing Regulation (EU) 2023/1773 (transitional) and the consolidated Regulation (EU) 2023/956 (definitive), both indexed in the EU CBAM knowledge base.
Transitional period: penalties for reporting failures
Every importer of CBAM goods, or its indirect customs representative, had to file a quarterly CBAM report within one month of the end of each quarter (Art. 35(1)). Under Article 16 of Implementing Regulation 2023/1773, Member States had to penalise a reporting declarant who:
- had not taken the necessary steps to submit a CBAM report; or
- had submitted an incorrect or incomplete report and did not correct it after the competent authority opened a correction procedure.
The penalty ranged between EUR 10 and EUR 50 per tonne of unreported emissions, rising in line with the European index of consumer prices. Unreported emissions were measured using the Commission's transitional default values. Authorities weighed seven factors, including the extent of the gap, intent or negligence, past behaviour and cooperation. Higher penalties applied after more than two consecutive incomplete or incorrect reports, or when the failure to report lasted more than six months.
Enforcement followed a set procedure. The Commission periodically sent each competent authority a list of importers or representatives it had reason to believe had not filed. Where a report looked incomplete or incorrect, it told the authority what extra information was needed. The authority then opened the correction procedure and, if the declarant did not act, imposed the penalty (Reg. 2023/956, Art. 35(3)-(5)). The last quarterly report, covering October to December 2025, was due by 31 January 2026, so transitional-period enforcement can continue into the definitive period.
Correcting transitional reports
A report could be modified up to two months after the end of its quarter. On a justified request, the authority could allow resubmission or correction within one year of the quarter's end (IR 2023/1773, Art. 9). Corrections could therefore still be in progress well into 2026.
Definitive period: the sanctions in Article 26
Definitive-period CBAM penalties
| Situation | Penalty | Does payment discharge the obligation? |
|---|---|---|
| Authorised declarant fails to surrender enough certificates by 30 September (Art. 26(1)) | Same as the EU ETS excess emissions penalty (Art. 16(3)-(4) Directive 2003/87/EC), year of importation, per certificate | No: certificates still owed (Art. 26(3)) |
| Shortfall caused by wrong data from an operator, verifier or carbon-price certifier (Art. 26(1a)) | May be reduced, but must remain effective, proportionate and dissuasive | No |
| Person other than an authorised declarant imports CBAM goods (Art. 26(2)) | 3 to 5 times the Art. 26(1) penalty per certificate not surrendered | Not specified |
| Importer exceeds the 50-tonne threshold without authorisation (Art. 26(2a)) | 3 to 5 times, on all embedded emissions of the year; may be reduced if exceeded by 10% or less, but not below the Art. 26(1) level | Yes: releases from declaring and surrendering |
| Application filed by 31 March 2026 later refused (Art. 17(7a)) | Art. 26(2a) penalty on 2026 imports, emissions set with default values | Yes |
The knowledge base does not contain the ETS Directive, so it cannot give the euro value of the excess emissions penalty. Check Article 16 of Directive 2003/87/EC as currently applicable. For unauthorised imports, the competent authority counts the certificates due from net mass and default values, after the free-allocation adjustment (Art. 26(4a)).
When the declaration is wrong or missing
- Review window: the Commission, and the competent authority, may review a declaration up to the end of the fourth year after it was due, including through audits at the declarant's premises (Art. 19(2)).
- Preliminary calculation: if no declaration is filed, or the number of certificates looks wrong, the Commission calculates what should have been surrendered. This must be done by 31 December of the year after the missed deadline, or of the fourth year after an incorrect declaration (Art. 19(4)).
- Definitive decision: the competent authority sets the number and requires the additional certificates within one month. The decision must give reasons and explain the right of appeal (Art. 19(5)).
- Penalty notice: this states the amount, due date, how to pay and the right of appeal. Unpaid sums are recovered under national law (Art. 26(4)-(5)).
- Over-surrender: if too many certificates were surrendered, the excess is repurchased (Art. 19(6)).
Beyond fines: revocation and quarter-end checks
The competent authority must revoke authorised declarant status for a serious or repeated failure to surrender certificates, or to keep enough on account at quarter-end (Art. 17(8)). From 2027, the account must hold certificates for at least 50% of embedded emissions imported since 1 January at the end of every quarter (Art. 22(2)). If the Commission finds a shortfall, the declarant is notified and has one month to put it right (Art. 22(3)). Implementing Regulation 2025/2549 adds a 2026-specific rule: where a revocation takes effect during 2026, the certificates due must be surrendered by 15 February 2027.
Threshold games are a serious infringement
Arrangements set up mainly to keep an importer below 50 tonnes, and which are not genuine, are disregarded. The importer is treated as having committed a serious infringement (Art. 25a(4)). That affects both penalties and any future application for authorisation.
Avoiding penalties: a checklist for EU importers and their UK suppliers
- Track each importer's cumulative net mass across all CN codes and suppliers; the 50-tonne exemption ends the moment it is exceeded.
- Make sure any indirect customs representative is itself an authorised declarant (Art. 5(1a)).
- Agree delivery dates for verified emissions reports. The Commission's verification guidance suggests mid-August at the latest.
- Budget for certificate purchases from 1 February 2027 and for quarter-end holdings from 2027.
- Keep declarations, verification reports and carbon-price evidence until the end of the fourth year after the declaration year (Arts 7(6) and 9(3)).
- For UK operators: monitor and report carefully, because incorrect operator data is expressly named in Article 26(1a).
Specific scenarios, such as "What happens if I simply don't file my CBAM declaration one year?", can be checked in the knowledge base. Answers quote Articles 19 and 26 directly.
Check CBAM sanction rules with citations
The CBAM knowledge base covers penalties, reviews and revocation for both the transitional and the definitive period.
This summary reflects Regulation 2023/956 as consolidated on 20 October 2025 and Implementing Regulations 2023/1773 and 2025/2549. It is not legal advice. National enforcement practice and any UK regime are outside the scope of the knowledge base.
Frequently asked questions
What was the CBAM fine for not reporting during the transitional period?
Between EUR 10 and EUR 50 per tonne of unreported emissions, increasing with the European consumer price index. Higher penalties applied after repeated incorrect reports or more than six months of non-reporting (IR 2023/1773, Art. 16).
What is the CBAM penalty from 2026?
For an authorised declarant that has not surrendered enough certificates by 30 September, a penalty identical to the EU ETS excess emissions penalty per certificate not surrendered (Art. 26(1)). The certificates remain due (Art. 26(3)).
Can a UK supplier be fined under CBAM?
The penalties in Article 26 target authorised declarants and persons importing into the EU. A supplier's incorrect data can, however, be the cause of its customer's penalty, which the authority may then reduce (Art. 26(1a)).
What happens if an importer exceeds 50 tonnes without authorisation?
It faces three to five times the standard penalty on all embedded emissions of the year. A reduction is possible if the threshold was exceeded by no more than 10%, and paying releases it from declaring and surrendering (Art. 26(2a)).
Can authorised declarant status be withdrawn for non-compliance?
Yes. The competent authority revokes the status for serious or repeated failure to surrender certificates or to keep enough on account at quarter-end (Art. 17(8)).
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