For nonEU exporters—from the United States and the United Kingdom to Turkey, Switzerland and other trading partners—CBAM is not merely a reporting obligation but a structural decision point. Companies that treat CBAM as an isolated compliance task risk operational friction, unmanaged carbon exposure and weakened market position. Organisations that adopt CBAM as a governance and marketentry decision can convert regulatory duty into a competitive advantage. Establishing an EU entity to act as the CBAM declarant gives firms direct control over emissions data, financial flows and future EU operations while reducing counterparty and reputational risk.  

In this article, we explain the strategic rationale, we clarify the legal and operational requirements, and offer a pragmatic decision framework for exporters from diverse jurisdictions considering direct registration versus continued reliance on intermediaries.

This article was written by Jaouad Bantal ([email protected]) and Mario van den Broek ([email protected]). Jaouad and Mario are part of RSM International Tax & Consulting with a strong focus on Supply Chain Management & Sustainability.  

CBAM requires importers of carbonintensive goods to account for embedded greenhouse gas emissions and, from the certificate phase, to purchase tradable instruments reflecting those emissions. Only entities established within the EU and registered as authorised declarants can fulfil these obligations directly.  

NonEU companies therefore face a binary strategic choice: continue using indirect customs representatives that assume the declarant role, or create a local EU presence and internalise responsibility. This choice has consequences beyond administration; it alters governance, cost structure and commercial flexibility in a policy environment that is likely to broaden and harden over time.

Strategic rationale for an EU Entity

Forming an EU subsidiary is a deliberate governance decision that captures several strategic advantages. A local entity provides an unambiguous regulatory interface, improves the accuracy and traceability of emissions data, and embeds certificate procurement within the company’s treasury and procurement functions. For exporters from highvolume markets such as the United States, established service suppliers in the UK, manufacturing hubs in Turkey, or highly integrated exporters in Switzerland, the ability to control data flows and financial settlements reduces the risk of unexpected liabilities and reputational damage resulting from thirdparty errors or divergent operational incentives.

Beyond risk reduction, an EU presence creates optionality. It facilitates tighter integration with EU customers and logistics partners, simplifies settlement for certificates and tariffs, and enables future activities such as warehousing, valueadded distribution or local sales. Early adopters also gain strategic learning advantages: they refine data pipelines, audit readiness and commercial offerings ahead of competitors, which matters if CBAM expands to additional product categories or if member states layer complementary national measures on top of the EU framework.

Legal and Operational Implications

Establishing an EU entity to serve as CBAM declarant requires specific legal and operational steps. The entity must obtain an EORI registration, complete national CBAM authorisation through the EU platform and implement systems that reconcile supplierprovided emissions data with customs declarations.  

These steps demand corporate formation, tax registration and the establishment of auditable internal controls. Operationally, firms must design data architectures that link supplier documentation to SKUlevel traceability and quarterly CBAM reporting, and they must define governance that allocates responsibility clearly between parent and subsidiary for data quality, certificate procurement and financial settlement.

The shift from indirect representation to direct registration changes the cost profile: variable external fees are replaced by predictable inhouse administration costs and investments in compliance technology. For exporters with frequent, predictable shipments, this reallocation typically improves control and reduces longterm compliance volatility. For firms in jurisdictions with different legal traditions—whether the US, the UK, Turkey or Switzerland—specific corporate and tax considerations will influence the choice of jurisdiction and entity form within the EU, so early engagement with crossborder legal and tax advisers is essential.

When Indirect customs representation remains an option 

Indirect representation by customs or logistics partners remains a valid interim strategy for certain exporters, particularly those with low or intermittent EU volume, pilot shipments or dayone market tests. For these firms, a carefully negotiated service agreement, clear servicelevel commitments and active monitoring are prerequisites. The nonEU principal must recognise that the representative will be the formal declarant and primary regulatory contact, which transfers legal exposure to the intermediary and limits the principal’s ability to manage certificate flows directly.  

Exporters from the US, UK, Turkey and elsewhere should treat indirect representation as a staged approach—with clear conversion triggers such as cumulative import volume, changes in CBAM scope or audit outcomes—rather than a permanent substitute for direct registration where scale or strategic importance demands it.

Decision framework and recommendations

Companies should evaluate entity choices through a pragmatic, forwardlooking framework that balances volume, strategic importance, risk tolerance and growth plans. The first step is exposure quantification: map current and projected CBAMeligible imports, model certificate costs under plausible carbon price trajectories and translate these into expected financial exposure. The second step is an operational gap assessment: determine whether existing IT, procurement and compliance processes can be adapted to produce auditable emissions records or whether those controls are best established within a dedicated EU entity. The third step is scenario testing and trigger definition: model the operational, fiscal and reputational consequences of remaining represented versus converting to direct registration and define objective triggers for conversion.

Where EU imports are recurring, sizable or central to strategic objectives, proceed to incorporate a dedicated EU entity and equip it as the centre of regulatory competence for CBAM and related carbontrade measures. Structure that entity to integrate with procurement, logistics and treasury and to provide consolidated reporting to the parent. Where imports are limited or exploratory, maintain indirect representation while building data capability, negotiating strong contractual protections and preparing a documented migration plan.

Engage external advisers early to optimise entity selection, tax treatment and the design of data and control frameworks, and to negotiate robust interim arrangements with representatives where necessary. Use technology to automate data capture and reconciliation so that emissions evidence is auditable and defensible, and treat the entity decision as part of a broader commercial strategy rather than a narrow compliance exercise.

Forward thinking  

CBAM is a systemic policy change that forces a fundamental choice about how nonEU exporters engage with the EU market. For exporters from the United States, the United Kingdom, Turkey, Switzerland and other trading partners, establishing an EU entity is often the prudential and strategic response when imports are material and recurring. A local entity converts CBAM from a compliance cost into a platform for governance, market access and operational resilience, while reducing dependence on intermediaries whose incentives or capabilities may be misaligned. Where immediate incorporation is not justified by scale, indirect representation can be a temporary, monitored strategy, but it must be accompanied by clear contractual protections and a triggerbased migration plan. Firms that align corporate structure with longterm trade ambitions will be best placed to manage carbon exposure, satisfy regulators and derive competitive advantage from the transition to carbonaware trade.

RSM is a thought leader in the field of Supply Chain Management & Sustainability. We provide frequent insights through training and the sharing of thought leadership, based on our detailed knowledge of industry developments and practical applications gained from working with our customers. In case of any questions, please contact one of our consultants. 

Do you have a question? We will get back to you as soon as possible.