CBAM Quarterly Reports vs Annual Declarations
During the transitional phase (2023–2025), importers submit quarterly reports with no financial penalty. From 2026, importers must submit an annual CBAM declaration and surrender paid certificates.
| Dimension | Quarterly Report (Transitional) | Annual Declaration (Definitive) |
|---|---|---|
| Active Period | October 1, 2023 – December 31, 2025 | January 1, 2026 onwards |
| Frequency | 4 times per year | Once per year |
| Deadline | One month after the end of each quarter | May 31 of the following year |
| Financial Cost | Zero (reporting only) | Full financial liability (certificate surrender) |
| Verification Required? | No (self-declared data accepted) | Yes (must be verified by ISO 14065 body) |
| Use of Default Values | Allowed (with restrictions post-July 2024) | Allowed, but financially punitive |
| Submission Portal | CBAM Transitional Registry | CBAM Registry (Definitive) |
From Data Collection to Financial Enforcement
The Carbon Border Adjustment Mechanism was designed with a phased implementation to allow global supply chains time to adapt to complex new carbon accounting requirements. Understanding the shift from the transitional phase (quarterly reporting) to the definitive phase (annual declarations) is the most critical timeline issue for compliance officers.
During the transitional phase, the European Commission's primary goal was data collection and system testing. In the definitive phase, the goal shifts to financial enforcement and carbon leakage prevention.
When to focus on Quarterly Reports
- For all goods imported into the EU customs territory between October 1, 2023, and December 31, 2025.
- When establishing initial data pipelines with non-EU suppliers without the pressure of financial penalties for high emissions.
- When learning to navigate the CBAM Transitional Registry interface.
- When filing corrections (reports can be modified up to two months after the end of the reporting quarter).
When to focus on Annual Declarations
- For all goods imported from January 1, 2026, onwards.
- When budgeting for CBAM certificate purchases, as the declaration triggers the surrender obligation.
- When engaging ISO 14065 accredited verifiers, as third-party verification becomes strictly mandatory.
- When managing Authorised CBAM Declarant status, which is a prerequisite for importing covered goods during the definitive phase.
Real-world example: The 2026 Transition
Consider an Italian importer buying aluminium from the UAE. Throughout 2025, the importer files four quarterly reports. They use actual emissions data provided by the UAE smelter, but because verification is not mandatory, they simply upload the Excel spreadsheet provided by the supplier. No money changes hands.
On January 1, 2026, the rules change abruptly. The importer no longer files quarterly reports. Instead, they must ensure they are registered as an Authorised CBAM Declarant. Throughout 2026, they must purchase CBAM certificates to ensure that at the end of each quarter, they hold certificates covering at least 80% of the embedded emissions imported year-to-date.
By May 31, 2027, the importer must file their first Annual CBAM Declaration covering all 2026 imports. This declaration cannot use unverified spreadsheets. The UAE smelter must hire an ISO 14065 accredited verification body to audit their 2026 emissions and produce a formal verification statement. The importer cites this verified embedded carbon record in their annual declaration and surrenders the exact number of CBAM certificates required.
Common misconceptions
- "Quarterly reporting continues forever." False. The quarterly reporting obligation ceases entirely on December 31, 2025. The definitive phase uses a purely annual declaration cycle.
- "Default values are banned in 2026." False. Importers can still use EU default values in the definitive phase if actual verified data is unavailable. However, because default values are set at the punitive 90th percentile of EU production, doing so will result in massively inflated CBAM certificate costs.
- "I only pay once a year." False. While the declaration is annual, importers must maintain a sufficient balance of CBAM certificates on their account at the end of each quarter during the definitive phase to cover imported emissions.
Regulatory citations
The rules for the transitional period (quarterly reporting) are established in Article 33-35 of Regulation (EU) 2023/956 and detailed in Implementing Regulation (EU) 2023/1773.
The rules for the definitive period (annual declarations) are established in Article 6 of Regulation (EU) 2023/956.
Frequently Asked Questions
When did CBAM quarterly reporting start?
CBAM quarterly reporting started on 1 October 2023 with the beginning of the transitional phase. Reports were due one month after each quarter end: Q1 by 30 April, Q2 by 31 July, Q3 by 31 October, Q4 by 31 January. The final quarterly report covered Q4 2025 and was due 31 January 2026.
When does the annual CBAM declaration replace quarterly reports?
The annual CBAM declaration replaces quarterly reports from 1 January 2026. The first annual declaration covering 2026 imports is due 31 May 2027. From 2026, importers must also maintain quarterly certificate balances covering at least 80% of year-to-date embedded emissions, even though the formal declaration is annual.
Is verification required for quarterly CBAM reports?
No. During the transitional phase, self-declared data was accepted for quarterly reports. The annual declaration from 2026 onwards requires verification by an ISO 14065 accredited body. This is one of the most significant operational changes between the two phases — manufacturers who relied on unverified estimates during the transitional phase must now invest in formal third-party verification.
What happens if I miss the CBAM quarterly report deadline?
During the transitional phase, late or missing quarterly reports could result in penalties under national law. The European Commission published guidance that national competent authorities should apply penalties proportionate to the infringement. In the definitive phase, failure to file the annual declaration or surrender sufficient certificates carries penalties of €50–€150 per tonne of unreported embedded emissions.
Can I use EU default values in the annual CBAM declaration?
Yes, but it is financially punitive. EU default values are set at the 90th percentile of EU production — meaning they assume your facility is dirtier than 90% of European plants. For most non-EU manufacturers, actual emissions are significantly lower. Using default values in the annual declaration means paying for far more CBAM certificates than necessary.