Carbon Border Adjustment Mechanism

Watch recording from the webinar about Carbon Border Adjustment Mechanism, during which we have presented the main characteristics of CBAM and we also have taken a closer look at the impact of this mechanism on the EU importers` activities of CBAM goods.

What is CBAM?

The proposal for the EU carbon border adjustment mechanism was adopted by the European Commission in July 2021 to complement the EU Emissions Trading System (EU ETS). 

CBAM aims to impose a CO2 charge (so-called Carbon Tax) on carbon-intensive products entering EU territory. The goal is to provide equal footing with foreign manufacturers, in order to reflect additional costs that EU domestic industry bears under EU ETS system. 

CBAM is a system that requires importers of certain goods to the EU to purchase carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. 

Scope of the regulation

In its initial form, the CBAM will only apply to imports of a selected number of goods that have been identified with a high risk of carbon leakages such as aluminum, iron, steel, electricity, cement, and some fertilizers, however, the current proposal leaves open the possibility to further expand the CBAM scope.

The new CBAM-related reporting regulations are expected to take effect as early as 1st January 2023. Subsequent stages of the regulations will be gradually introduced until the end of 2025. 

Watch recording from our webinar to be up to date with the newly introduced regulation.