EU: European Commission releases Guidance Document on CBAM Implementation for Importers of Goods into the EU

The Carbon Border Adjustment Mechanism (CBAM) is an environmental policy aimed at equating carbon costs between imported products and those produced within the EU. This document provides an overview and guidance on CBAM implementation for importers during the transitional period from 1 October 2023 to 31 December 2025.

Purpose and Overview

• Objective: Apply equivalent carbon costs to imported products as to those produced in the EU to prevent carbon leakage.
• Implementation: Importers will purchase and surrender CBAM certificates for the embedded emissions of imported goods.
• Price Basis: Certificates are priced based on the EU Emission Trading System (EU ETS) allowance price.
• MRV System: Monitoring, Reporting, and Verification (MRV) rules based on the EU ETS MRV system.

Transitional Period (1 October 2023 to 31 December 2025)

• No Financial Obligation: CBAM applied without financial obligation, solely for data collection purposes.
• Guidance Provided: To support harmonised implementation, non-legally binding guidance is offered to assist in correct interpretation.

Content Outline

• Chapter 3: Quick guidance for importers of CBAM goods and reporting declarants, highlighting key CBAM concepts and sources for more information.
• Chapter 4: Introduction to CBAM, including compliance cycles, roles, responsibilities, milestones, and deadlines for reporting declarants.
• Chapter 5: Overview of goods and value chains within the scope of CBAM.
• Chapter 6: Reporting obligations and recommendations for importers of CBAM goods.
• Chapter 7: General exemptions from CBAM.

CBAM Regulation Overview

• Regulation (EU) 2023/956: Establishes CBAM, outlining its scope, definitions, and requirements for authorised declarants and operators.
  • Key Articles:
    • Article 2: Scope of CBAM.
    • Article 3 and Annex IV: Definitions.
    • Articles 5 and 17: Application for authorised CBAM declarant status.
    • Article 10: Operator registration requirements.
    • Article 11: Designation of competent authorities.
    • Articles 14 and 16: Establishment of CBAM registry.
    • Article 30: Review of CBAM scope.
    • Articles 32-35: Reporting obligations during a transitional period.
    • Article 36: Effective dates for other articles.
  • Annexes:
    • Annex I: List of CBAM goods by industry sector.
    • Annex III: Non-EU countries and territories not covered by CBAM.
    • Annex IV: Methods for calculating embedded emissions.

Implementing Regulation (EU) 2023/1773

• Definitions and MRV Rules:
  • Article 2 and Annex II Section 1: Definitions.
  • Article 3: Reporting obligations and data parameters.
  • Articles 4 and 5: Calculation of embedded emissions.
  • Article 6: Reporting requirements for inward processing.
  • Article 7: Information on carbon price due.
  • Articles 8, 9, 13: Obligations for CBAM report submission and modification.
  • Article 16: Penalties for incorrect reporting.
  • Articles 19 and 22: Technical elements of the CBAM Transitional Registry.
  • Annexes:
    • Annex I: CBAM report structure.
    • Annex II: CN code mapping and production process definitions.
    • Annex IV: Minimum data for producers of goods.
    • Annexes V-VII: Data requirements for other reports.
    • Annex VIII: Standard factors for monitoring direct emissions.

Additional Resources

• Other Guidance:
  • Separate guidance for non-EU installation operators producing CBAM goods.
  • Instructions for importers on completing quarterly CBAM reports.
  • Excel-based template for calculating embedded emissions.
  • Training videos.
• Access: Guidance documents and templates are available on the European Commission’s dedicated CBAM website.

For further details, refer to the original legislation and guidance materials available at EUR-Lex and the European Commission’s CBAM website.

Source/Recommended Read: 

bc15e68d-566d-4419-88ec-b8f5c6823eb2_en (europa.eu)