CBAM Unpacked: What it is and why it matters now

Welcome to the first episode of our new Tax Bites mini-series dedicated to the Carbon Border Adjustment Mechanism (CBAM) and the broader EU carbon taxation landscape. In this opening episode, Pieter sits down with our CBAM experts, Helena and Aurélien to set the stage: how does CBAM fit into the wider EU Green Deal and Fit for 55 package, how does it interact with the EU Emissions Trading System (ETS), and why does it matter now more than ever? Our experts unpack the latest ETS and CBAM updates — from the phase-out of free allowances and the tightening of benchmarks, to the launch of the definitive period on 1 January 2026, the CBAM Omnibus simplification package, the refined methodology on embedded emissions, the proposed deduction for carbon prices already paid in third countries, and the proposed scope expansion to downstream iron, steel and aluminium goods from 2028. We also bust one of the biggest myths circulating in the market: the idea that CBAM "only costs 2.5% in year one". Spoiler — the real cost is materially higher. Tune in! Have a look at all our previous episodes and stay up to date on www.pwc.be/tax-bites