Carbon Border Adjustment Mechanism’s transitional phase

The adopted Implementing Regulation details the transitional reporting obligations for EU importers of CBAM goods, as well as the transitional methodology for calculating embedded emissions released during the production process of CBAM goods. During the CBAM’s transitional phase, traders will only have to report on the emissions embedded in their imports subject to the mechanism without paying any financial adjustment. This will give adequate time for businesses to prepare in a predictable manner, while also allowing for the definitive methodology to be fine-tuned by 2026.

To help both importers and third country producers, the Commission also published guidance for EU importers and non-EU installations on the practical implementation of the new rules. While importers will be asked to collect fourth quarter data as of 1 October 2023, their first report will only have to be submitted by 31 January 2024.

Please note that Carbon Border Adjustment Mechanism is a carbon tariff on carbon intensive products, such as cement and some electricity, imported into the European Union. The price of CBAM certificates would be linked to price of EU allowances under the European Union Emissions Trading System. CBAM is designed to stem carbon leakage from countries without a carbon price. Legislated as part of the European Green Deal, it takes effect in 2026, with reporting starting in 2023. CBAM was passed by the European Parliament with 450 votes for, 115 against, and 55 abstentions and entered into force in the 17 of May 2023.

Připravil: Ing. Roman Plevák, Ph.D., obchodní rada, Velvyslanectví ČR v Bagdádu