As the global economy adapts to the urgency of climate change, Carbon Border Adjustment Mechanisms (CBAMs) are quickly moving from concept to reality. These measures impose carbon-based fees or duties on imports according to their emissions, helping level the playing field for domestic producers and encouraging greener global supply chains.

For Canadian importers, 2025–26 could see the arrival of these regulations. This blog breaks down what CBAM means in the Canadian context, who may be affected, and how businesses can prepare.

What Is a Carbon Border Adjustment?

A Carbon Border Adjustment Mechanism taxes imports based on their associated greenhouse gas emissions. If your supplier operates in a jurisdiction with weak carbon regulations, your imports may face additional fees upon entering Canada. The goal is to align international trade with Canada’s ambitious net-zero emission targets and prevent “carbon leakage.”

Why Canada Is Considering CBAM

As Canada steps up its climate goals, a CBAM ensures imports don’t undercut efforts to reduce domestic emissions. Following global examples such as the EU’s rollout, Canada is considering a phased CBAM launch between 2025 and 2026.

This aligns with the ongoing modernization of customs processes, like the rollout of CARM. Our blog on What is CARM? and Digital Customs Declarations with ACROSS 2.0: What’s Changing for Importers underscores how customs modernization ties into broader regulatory shifts.

Industries Likely to Be Affected First

CBAMs are expected to target high-emission, trade-exposed sectors, such as:

  • Steel and aluminum products
  • Cement and construction materials
  • Fertilizers
  • Chemicals and plastics

If you’re importing from these categories, early planning is critical.

What Canadian Importers Should Watch For

1. Rising Landed Costs

Goods with significant carbon footprints may face additional charges, impacting margins. For insights on mitigating unexpected costs, see our post on Importing Pet Products and Supplies into Canada. It highlights how clearance, documentation, and fees affect small-scale goods — the same principle applies to CBAM-covered imports..

2. New Documentation & Reporting Requirements

Following the EU model, Canada’s CBAM will likely require:

  • Emissions data from foreign manufacturers
  • Certification of carbon-pricing compliance
  • Verified proof of origin and composition

As CBAM rolls out, your documentation processes will need to be airtight. Our blog post on Importing E-Bike Kits and Electric Mobility Products into Canada shows how technical documentation can determine clearance success — a lesson that applies to CBAM as well.

3. Supply Chain Resilience Becomes Carbon-Savvy

You may need to pivot to low-carbon suppliers or diversify your sourcing to avoid hefty carbon-related tariffs. Choosing certified sustainable suppliers or shifting to domestic sources may provide relief.

4. A Green Advantage for Sustainable Importers

If your goods are already green-certified or low in carbon footprint, CBAM can work in your favor, potentially making your products more competitively priced compared to higher-emission alternatives.

How to Prepare Today

Follow these steps to stay ahead:

  1. Audit your carbon footprint by product line.
  2. Ask suppliers for emissions data and documentation now.
  3. Consult a customs broker for compliance support; CBAM is likely to add complexity.
  4. Explore greener sourcing options in Canada or regions with stronger carbon policies.
  5. Stay informed and subscribe to Clearit Canada’s blog for updates and customs insights.

Conclusion

Carbon Border Adjustments will reshape import economics, especially for goods with high emissions. Preparing early not only ensures compliance but also offers a competitive edge for eco-conscious businesses.

Leverage existing knowledge, like navigating CARM and ACROSS 2.0, to build the foundational structures you’ll need for CBAM readiness.

Don’t let carbon rules catch you off guard. Partner with Clearit Canada now to make your imports CBAM-compliant and cost-effective.