Carbon Boarder Adjustment Mechanism - CBAM

CBAM is an acronym for: Carbon Border Adjustment Mechanism. It is a tool by the EU to mitigate the risk of “carbon leakage”. Carbon leakage describes the effect, when EU-based companies move their CO2-intensive production steps outside the EU to avoid the emission regulations like, paying a carob price in form of the EU emission trade system. Therefore, the EU-commission has put the CBAM regulation into place, to minimize the carbon leakage and to fairly account for the full emission of products used in the EU.

The CBAM regulation covers certain goods and selected precursors in the sectors: iron/steel, aluminum, fertilizers, cement, electricity and hydrogen. Here you can find a full list of all included CN-codes: LINK

Since the CBAM report is link with the customs declaration, the CN-code assigned by the EU-importer is the one to consider. If the importer decides to place an item under a CBAM relevant CN-code, this good is CBAM relevant and the importer will request the necessary information from you.

The time from October 2023 until December 2025 is called the CBAM transitional period. During this period the importers are asked to provide the European commission with information about how much CO₂ emission are created on their behalf in EU-third countries. The main purpose of this period is to establish the assessment of CO2 emissions at the manufacturer level und to give the EU-commission a better idea of the extend of the CO2 emission created in EU-third countries for products used in the EU in the end. From 2026 the CBAM-definite period will come into effect. During the definite period, the CO2 emission created outside the EU will be subject to a carbon price, similar to the EU-emission-trading-system.

During the transitional period the CBAM report has to be submitted for each quarter year. The first CBAM reporting period covers the time from October 2023 until December 2023, the next period is January 24 until March 24 and so on. The table provided under the following link shows the CBAM reporting periods and the deadlines of the corresponding CBAM reports. LINK

Any importer based in the EU, who imports CBAM-relevant goods from outside the EU into the EU needs to preparer a CBAM-report. If they don’t or are not able to, the European commission may impose penalties.

A supplier is someone who purchases goods and resells those. They are not operating the Installations in which those goods are manufactured.

In the CBAM-wording, the Operator is the company that is running one or more Installations in which CBAM-goods are manufactured.

The Installation refers to the factory or process route, in which CBAM-goods are manufactured. It is not necessary to name all machines/tools involved, it is only required to refer to the entire installation. Packaging and assembling sites are not regarded as a CBAM-relevant Installation.

No. The Installation relevant for CBAM is the last Installation, in which actual changes to the goods are executed (e.g. Rolling, melting, cutting, …). Packaging and assembling of different parts are not regarded as actual changes to the goods.

No. The installation is composed of all machines/tools necessary to complete the manufacturing of a good. An Installation for Iron and steel goods can for example be composed of: a blast furnace, a steelmaking process (e.g. Linz-Donawitz steelmaking) and a hot rolling process. It is not necessary to name all machines/tools involved, it is only required to refer to the entire installation.

In the beginning of the CBAM transitional period (first three reports) it is allowed to use standard emission values instead of specific emission values (describe the specific emission of the producing factory). The EU-commission has published a list of standard emission value based on the CN-Code. You can find this list here: LINK The standard emission values can be used unrestricted for the first three reports. Afterwards a good reason needs to be provided, if the standard values are to be used.