The first filings under the Carbon Border Adjustment Mechanism (CBAM) must be submitted by importers by 31 January 2024.
CBAM is the EU’s landmark tool that seeks to put a fair price on the carbon emitted during the production of carbon intensive goods that enter the EU. It requires importers to report ’embedded emissions’ of certain products and of electricity imported into the EU in order to ensure equivalent carbon pricing for imported and EU products and electricity. During the current transitional phase (running from 1 October 2023 to 31 December 2025), only reporting obligations will apply, with carbon pricing taking effect as of 1 January 2026.
The report for the first reporting period, Q4 2023, must be submitted on the CBAM Trader Portal no later than the end of this month (January 2024), and subsequent reports are due quarterly thereafter. Once a report is submitted, it can only be amended or corrected up to two months after the end of the relevant reporting quarter (although the reports for the first two reporting periods may be amended or corrected until 31 July 2024). Penalties for non-compliance, incorrect, or incomplete filings of CBAM reports shall be set by individual Member States, but must be between EUR 10 and 50 per ton of unreported embedded emissions.
A comprehensive explanation of the regime, along with the requirements for this first report can be found in an earlier Baker McKenzie post, here. The European Commission also recently released new CBAM guidance for importers of goods into the EU, installation operators outside the EU, and default values for the transitional period. Other useful information, including sector-specific information, can be found on the EU’s Taxation and Customs Union webpage. If you have any questions or require any assistance, we would be happy to help you navigate the process, and our team of lawyers with extensive customs, ESG, and energy expertise across Europe would also be able to assist with any other queries.
