On 1 October 2023, the Carbon Border Adjustment Mechanism (CBAM) entered into force. The CBAM is a carbon adjustment instrument at the EU’s external borders. A transition period runs until 31 December 2025. During this period, companies, which import CBAM goods, must report how much CO2 was emitted in the production of these goods after the end of each quarter. The CBAM applies to goods in the categories of
iron and steel, cement, fertilisers, aluminium, electricity and hydrogen. The reporting obligation applies to anyone, who imports CBAM goods with a value above âĴ150 per shipment into the EU. Reporting is done through the CBAM register. Reporting must be submitted within one month of the end of the quarter. A submitted CBAM report can be supplemented up to two months after the end of the quarter. Thereafter, a deadline to supplement or amend the submitted CBAM report can be requested up to one year after the end of the quarter.
Additional obligations under the CBAM will apply from 1 January 2026. From this year, pre-registered importers must start paying a price for CO2, emitted in the production of imported CBAM goods. A CBAM certificate must be handed in for every tonne of CO2 emitted. If a CO2 price has been paid in the country of origin of the goods, it will be deducted from the number of certificates. The price of a CBAM certificate is set each week using the average auction price in the European Emissions Trading Scheme for the previous week.
From 1 January 2026, quarterly reporting will cease. Instead, an annual CBAM declaration must then be made. This declaration must be verified by an accredited verifier. The European Commission will draw up further rules on the content and requirements of the declaration.
Source: Other | publication | 19-02-2024