What is the EU Carbon Border Adjustment Mechanism (CBAM)?
The EU Carbon Border Adjustment Mechanism (CBAM) is a climate measure and part of the EU Fit for 55 package initially applying to 6 sectors, including electricity. The aim of CBAM is to address the risk of carbon leakage by ensuring equivalent carbon pricing for imports and domestic (EU) production that is subject to carbon costs under the EU ETS.
From January 2026, importers into the EU will be required to report on the emission content of goods (including electricity) and purchase CBAM certificates for non-EU products.
Transitional Period (1st October 2023 to 31st December 2025)
A transitional period began on 1 October 2023. During this time, importers of electricity into the EU are required to submit a quarterly report of the embedded emissions in the imports, without certificates becoming due.
Reporting During the Transitional Period
Importers must provide a CBAM report on a quarterly basis, to the European Commission via the CBAM Transitional Registry.
Emissions Linked To Electricity Calculation
To determine the embedded emissions in electricity, the following calculation should be used. The emissions factor will be shared by the EU Commission and is based on data from the International Energy Agency (IEA).
Transitional Period In Summary
Definitive CBAM Period (2026) Onwards
The definitive period will begin on 1st January 2026. As appose to quarterly reporting, one report should be submitted annually by 31st May, with the first report to be submitted in 2027.
During the definitive period importers will need to report on the emission content of goods and purchase equivalent CBAM certificates for non-EU imports.
Reporting During the Definitive CBAM Period
At the same time, importers are required to surrenders the number of CBAM certificates that corresponds to the amount of greenhouse gas emissions embedded in their imported electricity.
The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in € / tonne of CO2 emitted.
If importers can prove, based on verified information from third country producers, that a carbon price has already been paid during the production, the corresponding amount can be deducted from their CBAM certificate obligations.
Implementing and Delegating Acts
A number of Implementing Acts and Delegating Acts are still to be finalised in 2024 and 2025 for the definitive CBAM period.
Information collected during the Transitional Phase will allow to further specify and finalise methodology and find synergies with existing monitoring schemes and will feed into the review of the mechanism and provide further clarity.
Indirect Customs Representative
Importers not established in the EU must appoint an indirect customs representative recognized as an authorized CBAM declarant to file the CBAM reports for their accounts.
Importers established in the EU are permitted to submit the CBAM reports themselves, and get authorization as an authorized CBAM declarant, however, may also chose to appoint another authorized CBAM declarant to file the reports.
Remant Customs, as an indirect customs representative, offers this service to file these reports. You can contact Remant Customs if you are interested in this service:
Tel: +32 3 205 66 00
More information regarding the EU CBAM can be found on the EU Commissions website.