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In this letter, a coalition of European trade associations agreed that the introduction of CBAM tool should be gradual, however the lack of official guidance might affect the correct implementation of the mechanism and put traders in an disadvantageous position. Associations that supported the letter called for the postponement in the application of reporting requirements, which should be applicable since October 2023. The letter was shared with DG Taxud, the Swedish and Spanish Permanent Representative and the chair of European Parliament’s Committee on Internal Market and Consumer Protection (IMCO).

Background:

The EU’s Carbon Border Adjustment Mechanism (CBAM) is a tool as part of the European Green Deal to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. It should gradually replace EU Emissions Trading System.

The transition period will be applicable since 1 October 2023 until end of 2025, imposing reporting requirements on importers of the embedded emissions in the imported goods. The report for the third quarter of 2023 should be submitted end of January 2024.

The permanent CBAM mechanism should enter into force on 1 January 2026.

In the transition phase, the following sectors will be affected: cement, iron and steel, fertelisers, electricity, aluminium and hydrogen.