Overview of the legal framework of the Green Deal

EU Carbon Border Adjustment Mechanism (CBAM)

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EU Carbon Border Adjustment Mechanism (CBAM)

The aim is to prevent products produced in the EU from being replaced by imports with higher CO2 emissions by introducing a CO2 border adjustment system. This is because the less stringent climate protection measures in many non-EU countries pose the risk of a shift in CO2 emissions. This system is a key component of the ‘Fit for 55’ package. It ensures that imports are subject to the same emission prices as products manufactured within the EU, as the production of CO2-intensive products is often relocated to countries with less stringent climate policies in order to save costs. The CO2 emissions of goods entering the EU will be fairly priced through the CO2 border adjustment system and clean industrial production in non-EU countries will be promoted.

Objectives:

Fair competitive conditions Prevetion of carbon leakage

From October 2023, importers will be subject to reporting obligations, imports must be documented and the following information must be provided:


Total quantity of the product type

Emissions in tonnes CO2 emissions per tonne of product type

CO2 price paid in country of origin
Schedule:
By the end of 2025
Emissions from imported goods from the sectors concerned must be recorded.
From 1 January 2025
Obligation to register CBAM applicants
From 2026
Certificates must be purchased for a fee. Imports from Iceland, Norway, Liechtenstein and Switzerland are not subject to CBAM.
It initially applied to goods whose production is particularly energy-intensive, such as iron and steel, cement or even hydrogen and electricity, as well as products that are upstream or downstream in the value chain.
In the future, the scope will be extended to other sectors.
The obligation to register CBAM declarants will apply from 1 January 2025. In the transition phase until the end of 2025, it will only be necessary to record the emissions of imported goods from the affected sectors. From 2026, certificates must be purchased for a fee.
A Transitional Registry has been developed to support importers in fulfilling their CBAM obligations.

Checklist:

When the above product groups are imported, importers must purchase emission allowances equivalent to the CO2 price that would have been paid if the goods had been produced in accordance with the EU rules for pricing CO2 emissions.
Conversely, manufacturers who can prove that they have already paid a price for the CO2 used in the production of the imported goods in a third country will have the corresponding costs waived.
Import control by the respective customs authorities
However, the levy must be calculated by the importer. The importer must ensure that he continuously purchases the correct quantity of CBAM certificates and can always cover at least 80 % of the imported goods.
The certificates can be acquired on a central platform.