Carbon Border Adjustment Mechanism (2024)

The EU’s Carbon Border Adjustment Mechanism (CBAM) is the EU's tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries.

By confirming that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU, the CBAM will ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU's climate objectives are not undermined. The CBAM is designed to be compatible with WTO-rules.

CBAM will apply in its definitive regime from 2026, while the current transitional phase lasts between 2023 and 2025. This gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry.

CBAM definitive regime (from 2026)

EU importers of goods covered by CBAM will register with national authorities where they can also buyCBAM certificates.The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in €/tonne of CO₂emitted.

EU importers willdeclare the emissions embedded in their imports and surrenderthe corresponding number of certificates each year.

If importers can prove that a carbon price has already been paidduring the production of the imported goods, the corresponding amount can be deducted.

On 1 October 2023, the CBAM entered into application in its transitional phase, with the first reporting period for importers ending 31 January 2024. The gradual phasing in of CBAM allows for acareful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities.

The CBAM willinitially apply to imports of certain goods and selected precursorswhose production is carbon intensive and at most significant risk of carbon leakage:cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. The objective of the transitional period is to serve as a pilot and learning period for all stakeholders (importers, producers and authorities) and to collect useful information on embedded emissions to refine the methodology for the definitive period.

During this period, importers of goods in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without the need to buy and surrender certificates. Indirect emissions will be covered in the scope after the transitional period for some sectors (cement and fertilisers), on the basis of a defined methodology outlined in the Implementing Regulation published on 17 August 2023 and its accompanying guidance.

The Implementing Regulation on reporting requirements and methodology provides for some flexibility when it comes to the values used to calculate embedded emissions on imports during the transitional phase. Until the end of 2024, companies will have the choice of reporting in three ways: (a) full reporting according to the new methodology (EU method); (b) reporting based on an equivalent method (three options); and (c) reporting based on default reference values (only until July 2024).

As of 1 January 2025, only the EU method will be accepted and estimates (including default values) can only be used for complex goods if these estimations represent less than 20% of the total embedded emissions. The Commission published default values on 22 December 2023. This report from the EU’s Joint Research Centre (JRC) fed into the preparation of those default values.

The Commission has also developed dedicated IT tools to help importers perform and report these calculations, as well as in-depth guidance, training materials and tutorials to support businesses in this transitional phase.

A review of the CBAM's functioning during its transitional phase will be concluded before the entry into force of the definitive system. At the same time, the product scope will be reviewed to assess the feasibility of including other goods produced in sectors covered by the EU ETS in the scope of the CBAM mechanism, such as certain downstream products and those identified as suitable candidates during negotiations. The report will include a timetable setting out their inclusion by 2030.

Sectors covered in the first phase of the CBAM - our environmental policy tool to help maximise the European and global impact of our fight against climate change.

Where to report

The Commission has developed the CBAM transitional registry to help importers perform and report as part of their CBAM obligations. Access to the registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established.

CBAM Transitional Registry – Link for importers

The provided link is accessible solely to importers who have been duly registered by the relevant National Competent Authorities.

If you haven't yet registered and you wish to access the registry, kindly reach out to the NCA of your respective Member State. Otherwise, unauthorised access to the registry is prohibited.

CBAM reporting declarants will find in the CBAM Transitional Registry User Manual an XSD file describing the full structure of the CBAM quarterly report, as well as a sample ZIP file, which may be uploaded in the Registry to fill in automatically the quarterly report’s data. For convenience, the XSD and the sample ZIP files can also be downloaded below.

In addition, the Commission has prepared a specific guidance document for declarants, which outline the functioning and step-by-step use of the “request delay” options in the CBAM Transitional Registry.

The CBAM Transitional Registry is continuously enriched with IT updates and fixes (see attachment below for the latest update).

Quarterly Report

This XLS file can be used by CBAM Declarants to facilitate completion of the CBAM quarterly reports using XML files. The XLS file indicates which are the optional/mandatory fields and provides the pre-defined values that are allowed for specific fields.

Furthermore the “Error Messages Glossary” tab is providing guidance on how the user can overcome the validation error messages displayed whenever a validation rule/condition is triggered due to an issue with the field values filled/selected by the user.

Error messages explained

How to access the transitional registry

Access to the Transitional CBAM registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established.

The recording of an info session on theCBAM Transitional Registry can be found here.

CBAM Transitional Registry Privacy Statement

Legislative Documents

Find below all relevant legislative documents linked to CBAM.

Guidance

To help stakeholders prepare for the new reporting obligations as from 1 October 2023, the European Commission has prepared written guidance documents, to help navigate the transitional period (1 October 2023 – 31 December 2025).

The Guidance document on CBAM implementation for installation operators outside the EU is also available in Arabic,Chinese, Hindi, Korean, Ukrainian and Turkish.

The Commission has published the default values guidance that can be used to determine embedded emissions in imported goods (except electricity) covered by the CBAM.

The Commission has prepared a Q&A document which provides answers to the most frequently asked questions about the CBAM. This document will be continuously updated:

The European Union is committed to supporting developing countries and Least Developed Countries (LDCs) in implementing the CBAM, greening their industries, and transitioning to renewable energy sources. The EU is also committed to help those countries interested in introducing or enhancing their carbon pricing systems. The following document provides an overview of guidance and technical support offered by the EU as well as of programmes supporting the green transition in developing countries and LDCs.

Sectoral information

The Commission organised a series of online webinars, covering general features of the CBAM as well as the specifics of each sector (iron & steel, aluminium, cement, fertilisers, electricity and hydrogen). Details and recordings of all webinars are available below and on the.

Information relevant to all sectors

In addition, anano-learning moduleintroducing CBAM for EU importers and customs declarants and third country operators has been made available.They presentthe purpose and aims of CBAM, and implications for importers and declarants, the main criteria for CBAM pricing, the six sectors targeted by CBAM and the roles and responsibilities within the CBAM administration system, as well asplanning priorities including key milestonesand explains the calculation methods and reporting requirements.

General publications3 January 2024

Checklist for EU importers

English

(385.41 KB - HTML)

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Cement

General publications3 January 2024

Information for importers of cement

English

(388.6 KB - HTML)

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Aluminium

General publications3 January 2024

Information for importers of aluminium

English

(431.05 KB - HTML)

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Fertilisers

General publications3 January 2024

Information for importers of fertilisers

English

(429.62 KB - HTML)

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Iron and steel

General publications28 November 2023

CBAM: Information for importers of iron and steel

Key points for importers of iron and steel to remember inthe CBAM transitional phase as of 1 October 2023

English

(428.96 KB - HTML)

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Hydrogen

General publications28 November 2023

CBAM: Information for importers of hydrogen

Key points for importers of hydrogen to remember in the CBAM transitional phase as of 1 October 2023

English

(429.47 KB - HTML)

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Electricity

General publications3 January 2024

Information for importers of electricity

English

(387.38 KB - HTML)

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National Competent Authorities of EU Member States (Restricted Access)

Why CBAM?