Carbon Border Adjustment Mechanism (CBAM) Report is online from Promostar

 Carbon Border Adjustment Mechanism (CBAM) Report is online from Promostar

    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 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).