Solutions
CBAM - Carbon Border Adjustment Mechanism
Mandatory reporting of actual emissions associated with CBAM commodities
What is CBAM?
Regulation (EU) 2023/956 on the Carbon Border Adjustment Mechanism (CBAM) entered into force on October 2023 and provides for new obligations for importers of certain carbon-emitting goods.
The aim of CBAM is to prevent the relocation of the production from the EU of goods from sectors such as cement, iron/steel and aluminium, hydrogen and electricity to third countries with more permissive climate policies and to replace them with imports of goods whose production involves high carbon dioxide emissions.
The timeline for the implementation of CBAM?
The regulation provides for two main phases of implementation, the first consisting of a transition period (October 2023 - December 2025) in which declarants (importers or customs representatives, in the case of indirect representation) will only be required to report the carbon emissions embodied in the process of obtaining the goods.
Starting with 2026, the second phase of the regulation becomes operational, under which declarants, in addition to the obligation to report emissions, will have to purchase CBAM certificates that they will later hand over through the CBAM register, proportional to each ton of CO2 equivalent emissions related to imported CBAM goods.
Also starting with 2026, to be able to submit CBAM reports for imported goods and to be able to operate transactions with CBAM certificates, declarants must be authorized in the CBAM register. To this end, from 2025 onwards, the competent authorities will open the period for the submission of applications for authorization, so that in 2026 the mechanism will be fully functional.
What is CBAM reporting?
During the transition period, declarants must register in the CBAM transitional register and submit quarterly reports in the CBAM portal made available by the European Commission through the EU Trader portal.
Depending on the imported products and the method of production, the reports must include a series of information, among the most important being those related to the quantity and origin of the goods, the tariff classification, the incorporated direct and indirect emissions.
In the first three quarters of the transition period, the European Commission allowed declarants to use embedded emissions based on published default values. As of July 2024, declarants are required to report actual embodied emissions for CBAM goods.
Deloitte's experience
At Deloitte we have a multidisciplinary team of tax advisors, customs experts and Global Trade Advisory specialists who have deep knowledge of CBAM reporting. The Deloitte team can guide you in complying with CBAM obligations at all stages of implementation, such as registering for CBAM reporting, import impact analysis, submitting information required for reporting, preparing CBAM reports, preparing for the purchase of CBAM certificates, etc.
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