The EU regulation establishing a mechanism for carbon border adjustment, also known as the Carbon Border Adjustment Mechanism (CBAM), has become a reality.

It concerns a new mechanism adopted by the EU to address climate change and reduce greenhouse gas emissions.

This regulation may have implications for your import activities in the customs territory of the European Union. Below, you will find a summary of the key aspects and dates that you need to remember regarding CBAM.

• Objective of CBAM: CBAM is designed to create a level playing field and reduce carbon leakage by ensuring that goods economically originating from outside the European Union pay a price for the CO2 emissions associated with their production.
• Targeted goods: In the initial phase, CBAM will apply to the release for free circulation of cement, iron and steel, aluminum, hydrogen, fertilizers, and electricity (or processed products from those goods resulting from the inward processing procedure). These sectors have been chosen due to their significant greenhouse gas emissions and economic relevance.
• The regulation enters into force on May 17, 2023. It will be phased in, starting from October 1, 2023.
• From October 2023 to December 2025, a transition period will be in place without financial impact.
• During the transition period, importers must report the embedded emissions in goods imported during the previous quarter of the calendar year on a quarterly basis, including direct and indirect emissions, as well as any actual carbon prices paid abroad. The reporting requirement does not apply to returning goods initially exported as Union goods from the customs territory, nor to processing products resulting from the passive processing arrangement. The final CBAM report, covering the last quarter of 2025, must be submitted no later than January 31, 2026.
• From December 31, 2024, concerned importers must apply for the status of authorized CBAM declarant (admission application).
• From 2026, the mechanism will also have a financial dimension. CBAM declarants must purchase CBAM certificates.
• By May 31 of each year, CBAM declarants must submit a CBAM declaration in a CBAM register. The first CBAM declaration, for the calendar year 2026, must be submitted no later than May 31, 2027.

The EU regulation concerning CBAM was published on May 16, 2023. You can consult the full text of the regulation here.

We strongly recommend staying informed about the developments regarding CBAM and taking the necessary steps to comply with the requirements.

If you have further questions or need specific guidance, you can always rely on our specialists.