The European Union (EU) has introduced the Border Carbon Adjustment Mechanism (CBAM) in line with its goals of environmental sustainability and reducing carbon emissions. This regulation aims to combat climate change and promote clean industrial production by imposing additional costs on the import of carbon-intensive products into the EU. With this step, the EU aims to both increase the competitiveness of the local industry and prevent carbon leakage.CBAM covers the carbon emissions that occur during the production process of imported goods and was implemented with a transition period starting in 2023. This period will continue until December 31, 2025. During the transition period, importers will only have to report the carbon emissions of their products. Starting in 2026, importers will start paying for their carbon emissions through certificates.
For products imported into the EU under this new regulation, importers must follow five important steps:
- Check whether imported goods are covered by CBAM: The first step is to check whether imported products are covered by CBAM regulations. The CBAM regulation applies to carbon-intensive sectors such as cement, aluminum, fertilizer, electricity, iron and steel.
- CBAM registration procedures: Importers must register with National Competent Authorities (NCAs) in order to report carbon emissions of imported products. During the transition period, these registrations will play a critical role in monitoring and reporting carbon emissions.
- Ensure awareness of trading partners: Ensuring that non-EU trading partners have detailed knowledge of the CBAM regulations will avoid potential problems that importers may encounter in the process. The detailed guidance provided by the EU Commission guides importers through this process.
- Keeping abreast of training materials: General and sector-specific training modules offered by the EU Commission help importers to adapt to the new reporting tools and regulations. These materials make it easier for importers to understand their roles and responsibilities in the process.
- Submission of quarterly reports: From January 2024, importers will have to submit emissions reports for imported products on a regular basis. The first report must be prepared by January 31, 2024, covering data for the fourth quarter.
One of the biggest advantages of CBAM for importers is the availability of the CBAM Self-Assessment Tool. This tool helps importers quickly find out whether their products are covered by CBAM, what reporting needs to be done during the transition process and other necessary information. By entering information such as the CN code, country of origin and purpose of import, businesses can get fast and accurate results.
One of the biggest advantages of the CBAM Self-Assessment System is that it facilitates the understanding and implementation of complex regulations. By minimizing uncertainties in the compliance process, importers have the chance to identify potential risks in advance and run a safer operation. This tool from the European Commission is a critical part of the EU’s goal to achieve full compliance with CBAM by 2026. For more information and access to the CBAM guide: EU CBAM Guide.
