The Carbon Border Adjustment Mechanism (CBAM) obliges companies to purchase CO₂ certificates for emission-intensive imports. Reporting has been mandatory since October 2023.
From emissions trading to CBAM
CBAM - who is affected?
Exemptions from the reporting obligation
Reporting obligations - what needs to be done?
Implementation phase - what happens next?
Sustainability is becoming a necessity: CBAM is part of the European Green Deal, which, among other things, aims to make Europe the first continent to become climate-neutral by 2050. An intermediate step is the reduction of CO₂ emissions.
Reducing CO₂ emissions by 55% by 2030 compared to the baseline year of 1990 is an important EU target. To achieve this, CBAM is intended to supplement the European emissions trading system established in 2005, which is considered a central element of CO₂ reduction.
With the introduction of CBAM, the EU wants to encourage a more careful approach to CO₂ emissions worldwide, but also limit any economic disadvantages caused by "CO₂ leakage", i.e. the migration of industries to countries with less stringent regulations on CO₂ emissions. The border adjustment system will therefore ensure that production sites outside the EU are taken into account in emissions trading in the future.
The legal foundations were laid with Regulation (EU) 2023/956. This was specified in more detail on August 17, 2023 with Implementing Regulation (EU) 2023/1773 for the transition phase. The EU provides an overview of regulations and assistance on its Carbon Border Adjustment Mechanism website.
Specifically, anyone importing emissions-intensive goods into the EU will in future have to purchase CBAM certificates to compensate for the difference between the cost of CO₂ emissions in the country of production and the price of CO₂ certificates in the EU. In the transition phase until December 31, 2025, no purchase of CBAM certificates is necessary.
All companies that act as importers in the EU and, as such, import goods listed in Annex I of Regulation (EU) 2023/956 from third countries are affected.
This concerns goods from the following sectors
These companies must prepare a CBAM report on a quarterly basis and submit it no later than one month after the end of the quarter.
Note: The decisive factor is the commodity code in the first four to eight digits (HS code and sometimes also CN code). If the commodity code is listed in Annex I, the goods are affected.
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There is no reporting obligation, among other things
Note: These and other exemptions can be found in Article 2 and Article 34 of Regulation (EU) 2023/956.
The declarant or, if the declarant is not established in the EU, their indirect representative is obliged to report. The following three types of reporting can be used for different periods of time:
The English-language „Guidance document on CBAM installations for importers of goods into the EU” from August 2023 provides importers with important assistance from the EU. A quick guide is provided on the first few pages for a better overview.
The first report must be submitted by January 31, 2024. Corrections are possible for up to two months. A longer deadline applies for the first two reports; changes are permitted until July 31, 2024.
Article 16 of the CBAM Implementing Regulation provides for penalties of between 10 and 50 euros per tonne of unreported emissions if deadlines are missed or reports are incomplete or inaccurate.
Tip: If you use AEB for your import processing, you can already extract data from the system and evaluate it in Excel.
The regulations for applying for "approval as a CBAM declarant" will not apply until December 31, 2024. From January 1, 2025, only approved CBAM declarants will be allowed to carry out these imports.
From January 1, 2026, trading in CBAM certificates will then be fully implemented.
Further obligations will then apply at the end of the transition phase from 2026. Until then, the Commission will also examine whether the scope of application should be extended to other goods. Organic chemicals and polymers are already being discussed during the transition phase.
By 2030, all goods covered by EU emissions trading are to be included.
The EU Commission offers free online seminars and learning modules on the Customs & Tax EU Learning Portal. It is best to search under the keyword "CBAM".
