The adoption of the Carbon Border Adjustment Mechanism (CBAM) affects all machinery and tooling companies as well as aluminium packaging. The Carbon Border Adjustment Mechanism (CBAM) Regulation was published in the Official Journal of the European Union (OJEU) and has been in force since 1 October 2023.
The intention
The CBAM is intended to protect the European energy-intensive economy from competitive disadvantages resulting from environmental and climate regulations. To achieve this, tariffs are imposed on products and raw materials that are cheaper due to “dirtier” production but are burdened with higher CO2 emissions.
Who is affected
The CBAM affects all companies within the European Union (EU) that import the following goods or products in pure or processed form from non-EU countries:
- iron, steel, cement, aluminium, electricity, fertilisers, hydrogen and some upstream and downstream (esp. iron and steel) products.
- By January 2030, it will be evaluated whether the CBAM will also be extended to chemicals and polymers as well as other downstream products.
Timetable and deadlines
The first reporting obligations will be imposed on affected companies as early as 1 October 2023. The CBAM mechanism will be fully implemented as of 1 January 2026.
Transition phase (1 October 2023 to 31 December 2025)
In the transition phase, the CBAM is to be introduced gradually (01 October 2023 to 31 December 2025). During this phase, companies will have to submit a so-called CBAM report on a quarterly basis.
- For this purpose, the direct and indirect emissions (Scope 1 & 2) generated in the production process of the imported goods must be calculated and documented. The report must contain data regarding the import quantity of direct and indirect CO2 emissions emitted abroad in the EU.
- In addition, the report must include data on any CO2 prices paid in the country of origin. However, in the transition phase, no financial compensation has to be created yet by surrendering a corresponding amount of CBAM certificates. These compensation certificates are not yet precisely defined, but the same mechanism and a price orientation analogous to the ETS certificates are to be expected.
- The CBAM report must be submitted by affected companies via the CBAM Transitional Registry for the first time by 31 January 2024 at the latest.
Full go-live (from 1 January 2026)
From the beginning of 2026, the companies concerned will be subject to more far-reaching obligations. These include:
- the need for a CBAM filing authorisation for the so-called “Authorised Filer” status,
- verification of the reported data on direct and indirect emissions by an accredited testing body,
- purchase of the correspondingly necessary number of CBAM allowances required to cover the embedded direct and indirect emissions via a central platform,
- preparation and submission of an annual CBAM declaration by 31 May of each calendar year for the emissions associated with the goods imported in the previous calendar year. The corresponding number of CBAM allowances must also be surrendered by this deadline.
We offer support
We at Berndt+Partner Consultants are happy to help you with the audit, preparation and, if necessary, reporting around the CBAM. We offer support through, for example:
- CBAM Quick Scan: Assessment of the product portfolio affected by CBAM and verification of the procurement pattern of the affected products as well as their origin,
- Establishment of the necessary monitoring and reporting systems,
- tool-based calculation of actual emissions until October 2023,
- development of a CBAM action plan for the affected products, supply chains and business units,
- review of the current CBAM compliance preparations (based on current responsibilities and competences) and a roadmap for the transition period as well as for the phase-in in 2026.
If you have any further questions about CBAM and/or our offer, please do not hesitate to contact us.
