The Carbon Border Adjustment Mechanism (CBAM) is a new, green way of pricing carbon in imports to the European Union (EU). The CBAM is designed to be compatible with WTO-rules and is part of the EU’s efforts to achieve its climate-neutrality objective by 2050 12.
The CBAM will be implemented in two phases. The first phase, which is a reporting-only phase, began on October 1, 2023, and will run until December 31, 2025 23. During this phase, importers will report the carbon content of their products to the EU 2. The second phase will begin on January 1, 2026, and will include the financial cost and full reporting regime of the CBAM..
Here are some key dates in the roll-out of the CBAM:
October 1, 2023: The CBAM enters into application in its transitional phase, with the first reporting period for importers ending on January 31, 2024
July 31, 2023: Generally, submitted reports may be modified up to two months after the end of the quarter. As an exception, first two reports can be modified until July 31, 2024
December 31, 2025: The reporting-only phase of the CBAM ends.
January 1, 2025: Until the end of 2024, companies will have the choice of reporting in three ways. As of 1 January 2025, only the EU method will be accepted
January 1, 2026: The CBAM’s financial cost and full reporting regime begin.
The CBAM will be applied to companies, not countries, based on the actual carbon content of imported goods. It will cover carbon-intensive sectors such as cement, iron and steel, aluminium, fertiliser, and electricity. The CBAM will also take into account the carbon price effectively paid by third-country operators.
The CBAM is a significant step towards achieving the EU’s climate goals and will help ensure that companies are held accountable for their carbon emissions.
A complete list of key dates in an infographic format is
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