On 17 August 2023, the EU adopted an Implementing Regulation on the Carbon Border Adjustment Mechanism (CBAM) that regulates the obligations of importers of certain goods during the transitional period. CBAM will initially apply to the following sectors: cement, aluminium, iron and steel, hydrogen, electricity, and selected fertilizers.
During the transitional period, which lasts from 1 October 2023 to 31 December 2025, importers will only report emissions released as part of the production of imported goods that fall under the scope of CBAM. Reports must be submitted quarterly within one month of the end of a calendar quarter.
If the data is not available, importers may use basic values published by the European Commission for imports made until 31 July 2024.
Since CBAM requires cooperation between a number of company departments, we recommend that importing companies start giving more attention to this issue now.
CBAM after transitional period
After the end of the transitional period, companies will have to pay financial compensation for carbon emissions embedded in imported goods. A company importing the above commodities will have to purchase CBAM certificates, the price of which will reflect EU ETS prices adjusted for all free allowances, which producers receive with regard to EU and carbon costs incurred during the production process in the producing country.
How we can help you - PwC as your partner on the CBAM reporting journey
Our team of subject matter experts is ready to assist you in understanding the obligations arising from the CBAM and in setting up the right processes for collecting the necessary data for your company.
Steps to be recommended
Planning your next steps
Don’t hesitate to contact us to find out if the mechanism will apply to your company and what you will need to do.
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