The Council of the European Union has published a proposal for a Council Decision setting the EU position within the EEA Joint Committee to incorporate the Carbon Border Adjustment Mechanism (CBAM) into the EEA Agreement, with specific adaptations for EFTA States Iceland, Norway, and Liechtenstein. The document, dated 2 July 2026, aims to ensure uniform application of CBAM across the European Economic Area by aligning customs rules, data exchange, and enforcement mechanisms.
The proposal incorporates CBAM Regulation (EU) 2023/956 and its 2025 amendment into the EEA framework. EFTA States would be required to adopt national legislation with non-preferential rules of origin and commodity codes substantively identical to EU rules for CBAM goods, and to report customs data to the CBAM Registry in the same format as EU Member States. CBAM certificate revenues from EFTA-based declarants would be allocated to the respective EFTA States. The proposal establishes a notification and alignment process for amendments to CN codes and Taric subdivisions, with a 45-day lead time, and tasks the EFTA Surveillance Authority with oversight of CBAM implementation, including audits and monitoring.
CBAM obligations for EFTA States apply from 1 September 2026 for certain articles and from 1 December 2026 for others, with full application from 1 January 2027. Liechtenstein is excluded from CBAM application under this Decision. EFTA States are required to join the joint procurement agreement for a common central platform for CBAM data exchange.
The proposal ensures a level playing field for carbon pricing across the EEA, preventing carbon leakage through uniform border adjustments. However, it imposes significant administrative and legislative adaptation burdens on EFTA States to align customs and classification systems with EU rules. The delayed full application until 2027 provides transition time but may create temporary competitive imbalances. The strengthened role of the EFTA Surveillance Authority in monitoring and enforcement expands its oversight capacity. Importers in EFTA States, particularly in sectors covered by CBAM (cement, steel, aluminum), may face changes in trade flows and compliance costs.