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Taxation and Customs Union

Carbon Border Adjustment Mechanism

Climate change is a global problem that needs global solutions. As the EU raises its own climate ambition, and as long as less stringent climate policies prevail in many non-EU countries, there is a risk of so-called ‘carbon leakage'. Carbon leakage occurs when companies based in the EU move carbon-intensive production abroad to countries where less stringent climate policies are in place than in the EU, or when EU products get replaced by more carbon-intensive imports.

CBAM

The EU’s Carbon Border Adjustment Mechanism (CBAM) is the EU's tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. 

By confirming that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU, the CBAM will ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU's climate objectives are not undermined. The CBAM is designed to be compatible with WTO-rules.

CBAM will apply in its definitive regime from 2026, while the current transitional phase lasts between 2023 and 2025. This gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry. 

CBAM definitive regime (from 2026)

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EU importers of goods covered by CBAM will register with national authorities where they can also buy CBAM certificates. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in €/tonne of CO2 emitted.

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EU importers will declare the emissions embedded in their imports and surrender the corresponding number of certificates each year.

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If importers can prove that a carbon price has already been paid during the production of the imported goods, the corresponding amount can be deducted.

CBAM transitional phase (2023 – 2025)

On 1 October 2023, the CBAM entered into application in its transitional phase, with the first reporting period for importers ending 31 January 2024. The gradual phasing in of CBAM allows for a careful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities.

The CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. The objective of the transitional period is to serve as a pilot and learning period for all stakeholders (importers, producers and authorities) and to collect useful information on embedded emissions to refine the methodology for the definitive period.

During this period, importers of goods in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without the need to buy and surrender certificates. Indirect emissions will be covered in the scope after the transitional period for some sectors (cement and fertilisers), on the basis of a defined methodology outlined in the Implementing Regulation published on 17 August 2023 and its accompanying guidance.

The Implementing Regulation on reporting requirements and methodology provides for some flexibility when it comes to the values used to calculate embedded emissions on imports during the transitional phase. Until the end of 2024, companies will have the choice of reporting in three ways: (a) full reporting according to the new methodology (EU method); (b) reporting based on an equivalent method (three options); and (c) reporting based on default reference values (only until July 2024).

As of 1 January 2025, only the EU method will be accepted and estimates (including default values) can only be used for complex goods if these estimations represent less than 20% of the total embedded emissions. The Commission published default values on 22 December 2023. This report from the EU’s Joint Research Centre (JRC) fed into the preparation of those default values.

The Commission has also developed dedicated IT tools to help importers perform and report these calculations, as well as in-depth guidance, training materials and tutorials to support businesses in this transitional phase.

A review of the CBAM's functioning during its transitional phase will be concluded before the entry into force of the definitive system. At the same time, the product scope will be reviewed to assess the feasibility of including other goods produced in sectors covered by the EU ETS in the scope of the CBAM mechanism, such as certain downstream products and those identified as suitable candidates during negotiations. The report will include a timetable setting out their inclusion by 2030.

Sectors covered in the first phase of the CBAM - our environmental policy tool to help maximise the European and global impact of our fight against climate change.

CEMENT IRON & STEEL ALUMINIUM
FERTILISERS ELECTRICITY HYDROGEN

 Where to report

The Commission has developed the CBAM transitional registry to help importers perform and report as part of their CBAM obligations. Access to the registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established.

CBAM Transitional Registry – Link for importers 

The provided link is accessible solely to importers who have been duly registered by the relevant National Competent Authorities.

If you haven't yet registered and you wish to access the registry, kindly reach out to the NCA of your respective Member State. Otherwise, unauthorised access to the registry is prohibited.

CBAM reporting declarants will find in the CBAM Transitional Registry User Manual an XSD file describing the full structure of the CBAM quarterly report, as well as a sample ZIP file, which may be uploaded in the Registry to fill in automatically the quarterly report’s data. For convenience, the XSD and the sample ZIP files can also be downloaded below. 

In addition, the Commission has prepared a specific guidance document for declarants, which outline the functioning and step-by-step use of the “request delay” options in the CBAM Transitional Registry.

The CBAM Transitional Registry is continuously enriched with IT updates and fixes (see attachment below for the latest update).

27 MARCH 2024
Transitional CBAM Registry user manual for Declarants
29 FEBRUARY 2024
Guidance for declarants - “Request Delayed Submission”

Quarterly Report 

3 APRIL 2024
CBAM Quarterly Report structure XSD and “stypes.xsd” (ZIP format)
27 MARCH 2024
CBAM Quarterly Report sample file for representatives
27 MARCH 2024
CBAM Quarterly Report sample file for importers 
27 MARCH 2024
CBAM Quarterly Report structure (XLS format)

This XLS file can be used by CBAM Declarants to facilitate completion of the CBAM quarterly reports using XML files. The XLS file indicates which are the optional/mandatory fields and provides the pre-defined values that are allowed for specific fields.
Furthermore the “Error Messages Glossary” tab is providing guidance on how the user can overcome the validation error messages displayed whenever a validation rule/condition is triggered due to an issue with the field values filled/selected by the user.

Error messages explained

Course Video - Declarant acts as Indirect Customs RepresentativeVideo available here.
Course Video - Importer for some Goods / Indirect Customs Representative for some GoodsVideo available here.
Course Video - Declarant acts as Importer for all GoodsVideo available here.

How to access the transitional registry

Access to the Transitional CBAM registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established.

20 MARCH 2024
Provisional list of National Competent Authorities (NCAs) for the Carbon Border Adjustment Mechanism

The recording of an info session on the CBAM Transitional Registry can be found here.

CBAM Transitional Registry Privacy Statement

 Legislative Documents

Find below all relevant legislative documents linked to CBAM.

17 MAY 2023
CBAM regulation in the Official Journal of the EU
17 AUGUST 2023
CBAM Implementing Regulation for the transitional phase
17 AUGUST 2023
Annexes to the CBAM Implementing Regulation for the transitional phase

Guidance

To help stakeholders prepare for the new reporting obligations as from 1 October 2023, the European Commission has prepared written guidance documents, to help navigate the transitional period (1 October 2023 – 31 December 2025).

22 DECEMBER 2023
Guidance document on CBAM implementation for importers of goods into the EU
22 DECEMBER 2023
Guidance document on CBAM implementation for installation operators outside the EU

The Guidance document on CBAM implementation for installation operators outside the EU is also available in ArabicChinese, Hindi, Korean, Ukrainian and Turkish.

11 APRIL 2024
CBAM communication template for installations

The Commission has published the default values guidance that can be used to determine embedded emissions in imported goods (except electricity) covered by the CBAM.

22 DECEMBER 2023
Default values transitional period
2 FEBRUARY 2024
Default values transitional period (Excel format)

FAQ

 The Commission has prepared a Q&A document which provides answers to the most frequently asked questions about the CBAM. This document will be continuously updated:

28 FEBRUARY 2024
CBAM_Questions and Answers

Sectoral information

The Commission organised a series of online webinars, covering general features of the CBAM as well as the specifics of each sector (iron & steel, aluminium, cement, fertilisers, electricity and hydrogen). Details and recordings of all webinars are available below and on the Customs & Tax EU Learning Portal.

Information relevant to all sectors

Info Session CBAM Transitional Registry Webinar recording available here.

In addition, a nano-learning module introducing CBAM for EU importers and customs declarants and third country operators has been made available. They present the purpose and aims of CBAM, and implications for importers and declarants, the main criteria for CBAM pricing, the six sectors targeted by CBAM and the roles and responsibilities within the CBAM administration system, as well as planning priorities including key milestones and explains the calculation methods and reporting requirements.

Checklist for EU importers
General publications3 January 2024
Checklist for EU importers

Cement

Webinar on rules, implications and reporting requirements for importers, exporters and producers of cement from the EU and third countries. Webinar recording available here.
Info Session CBAM Declarant Portal - Cement and Aluminium sectors  Info Session recording available here.
e-learning module specific to the cement sector Module available here in 10 language versions
Information for importers of cement
General publications3 January 2024
Information for importers of cement

Aluminium

Webinar on rules, implications and reporting requirements for importers, exporters and producers of aluminium from the EU and third countries.  Webinar recording available here.
Info Session CBAM Declarant Portal - Cement and Aluminium sectors

Info Session recording available here.

e-learning module specific to the aluminium sector Module available here.
Information for importers of aluminium
General publications3 January 2024
Information for importers of aluminium

Fertilisers

Webinar on rules, implications and reporting requirements for importers, exporters and producers of fertilisers from the EU and third countries.  Webinar recording available here.
Info Session CBAM Declarant Portal - Fertiliser and Electricity sectors Info Session recording available here.
e-learning module specific to the fertiliser sector Module available here.
Information for importers of fertilisers
General publications3 January 2024
Information for importers of fertilisers

Iron and steel

Webinar on rules, implications and reporting requirements for importers, exporters and producers of iron and steel from the EU and third countries. Webinar recording available here.
Info Session CBAM Declarant Portal - Hydrogen and Iron & steel sectors Info Session recording available here.
e-learning module specific to the iron and steel sector Module available here.
factsheet cover
General publications28 November 2023
CBAM: Information for importers of iron and steel

Key points for importers of iron and steel to remember in the CBAM transitional phase as of 1 October 2023

Hydrogen

Webinar on rules, implications and reporting requirements for importers, exporters and producers of hydrogen from the EU and third countries. Webinar recording available here.
Info Session CBAM Declarant Portal - Hydrogen and Iron & steel sectors Info Session recording available here.
e-learning module specific to the hydrogen sector Module available here.
factsheet cover
General publications28 November 2023
CBAM: Information for importers of hydrogen

Key points for importers of hydrogen to remember in the CBAM transitional phase as of 1 October 2023

Electricity 

Webinar on rules, implications and reporting requirements for importers, exporters and producers of electricity from the EU and third countries.  Webinar recording is available here.
Info Session CBAM Declarant Portal - Fertiliser and Electricity sectors Info Session recording available here.
e-learning module specific to the electricity sector Module available here.
Information for importers of electricity
General publications3 January 2024
Information for importers of electricity

National Competent Authorities of EU Member States (Restricted Access)

Webinar for EU Member States’ National Competent Authorities (NCA) on CBAM-related legal and policy matters Webinar recording is available here.
e-learning module specific for National Competent Authorities e-learning module will soon be available. 

Why CBAM?