The EU's Carbon Border Adjustment Mechanism launches its definitive regime on January 1, 2026, after a transitional phase from October 2023 through December 2025. Importers of more than 50 metric tons of cement, iron & steel, aluminum, fertilizers, electricity, & hydrogen must apply for authorized CBAM declarant status. They will purchase certificates priced at EU ETS auction rates, calculated as quarterly averages in 2026 & weekly averages from 2027 onwards. December 2025 draft proposals show aluminum benchmarks at 1.423 metric tons CO₂ per metric ton. CBAM eventually captures over 50% of EU ETS sector emissions, representing the world's first fully operational border carbon adjustment mechanism.