At yesterday’s event on CBAM organized by the European Commission, all attention was on the major changes in the Carbon Border Adjustment Mechanism (CBAM). With an impressive attendance of over 5,000 people, it was clear that the topic remains hot.
Impact of CBAM on global trade and regulation
CBAM does not target individual countries, but holds producers globally accountable. Collecting accurate data on direct and indirect emissions is now crucial to set fair prices and reduce emissions effectively. The CBAM team in the Directorate-General for Taxation and Customs Union (DG TAXUD) is working intensively to ensure robust emission calculations at global level.
The future of CBAM: Transition to a greener world
CBAM’s ultimate goal is to become redundant as emissions transparency and decarbonization become integrated into all aspects of trade and production. Currently 90% of imports are managed by only 10% of reporters, highlighting the need to simplify reporting. The EU receives 60,000 quarterly reports and is satisfied with the coverage. A more detailed analysis of these reports is expected in October, once the actual primary data is available.
Reporting and future challenges
Although 95% of CBAM reports use default values, sectors such as cement have made progress, with 40% of them providing actual data on their emissions. Experience in reporting emissions and factors such as country of origin and local regulations play an important role. For example, the EU and large trading partners, including the US, UK and China, have provided significant data, and Mozambican aluminum has submitted considerable volumes of primary data.
Key changes in reporting by 2024 and 2026
From October 2024, importers will have to move away from default values in favor of actual data, improving the accuracy of emissions reporting. The definitive system will make the process easier, and mandatory verification of installations’ emissions will start in 2026.
CBAM’s global impact and support for developing countries
The impact of CBAM on developing and least developed countries is significant. The G7 Climate Club is exploring ways to support these countries, and the European Commission is optimistic about developments in other CBAMs, including those in the UK and Australia, which are concluding their consultations.
Rules and penalties for importers and producers
Importers need to be wary of the de minimis rule, with a €150 threshold that could be changed. The CBAM team is focusing on identifying the causes of non-reporting and implementing sanctions for importers who do not correctly report emissions. Information campaigns in third countries are essential to help importers comply.
Privacy issues and future checks for manufacturers
By early 2025, a new registry module will allow exporters to submit sensitive data directly, which will be used to estimate emissions without being visible to importers. Mandatory verification will start in 2026, with clear guidance published by the end of 2024.
Important dates to remember
End 2024: Report on the extension of CBAM to downstream products.
Mid-2025: Calculation of emissions at installations, carbon pricing and technical changes to regulation.
2026: Purchase of CBAM allowances on a central platform.
Key questions and answers
Customs cannot provide specific data required by CBAM.
Non-EU entities must use an indirect customs representative for reporting.
From 2026, CBAM allowances will be purchased on a central platform with prices aligned to ETS allowances.
Get ready for the changes!
The European Commission webinar provided key updates on the CBAM evolution and what companies need to do to comply with the new regulations. As the final period approaches, it is vital to stay informed and align with the new requirements.