Deadline for first Carbon Border Adjustment Mechanism (CBAM) is fast approaching!
It is important to remember that the first reporting period for CBAM is approaching fast, and the deadline is set for January 31st, 2024. The CBAM is an essential tool in the EU's Fit for 55 Agenda, which aims to combat carbon leakage and promote the global adoption of greener technologies. During the transitional phase of CBAM, which started in October 2023 and will end in December 2025, the regulation applies to imports of cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. This period will serve as a learning phase for stakeholders. After this phase, the CBAM will move into the definitive period, slowly phasing out the EU Emissions Trading System (ETS). During the transitional phase, financial adjustments are not required, but penalties are still applicable. In the end, you can find some resources that you may find useful.
The default values have been made available to assist in the calculation of embedded emissions
By December 22, 2023, the European Commission disclosed default values for determining embedded emissions in imported goods under the Carbon Border Adjustment Mechanism (CBAM) when actual embedded emissions cannot be determined.
• During the first three quarterly reports (Q4 of 2023 and Q1&2 of 2024), declarants may report embedded emissions based on available default values.
• From Q3 of 2024 until the end of 2025, declarants can still estimate complex goods emissions, with a maximum of 20% of overall embedded emissions, which qualify as "estimations."
• The default values will be periodically updated after the first reporting period, which is the final quarter of 2024. These updates will be based on the data collected in the transitional registry and feedback from the EU and non-EU importers.
• The Commission will facilitate the direct submission of business data from non-EU producers to the CBAM Registry to enhance reporting obligations.
• You can find the default values here
New Update: 30-Day Extension for CBAM Reports
A new feature will be added to the Transitional Registry from 1st February to assist declarants who may have faced difficulties in submitting their quarterly CBAM report. This feature will enable them to request a delayed submission, giving them an additional 30 days to submit their CBAM report.
Related Resources
• EUs Fit for 55 Package
• How importers can prepare for reporting
• CBAM Compliance and Reporting A Practical Guide for Businesses
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