EU Carbon Border Adjustment Mechanism (CBAM)

The European Union (EU) regulation on the Carbon Border Adjustment Mechanism (CBAM) was adopted on 17 May 2023 and the CBAM transitional period started 1 October 2023. The introduction of the CBAM has a significant impact on businesses importing goods into the EU. Learn about the CBAM and what you need to do during the transitional period.

On 10 May 2023, the EU co-legislators signed the CBAM Regulation, which officially entered into force the day after its publication in the EU Official Journal on 16 May 2023. On 17 August 2023 the EU Commission adopted its implementing regulation laying down reporting obligations for the purposes of CBAM during the transitional period.

The transitional period, during which importers are required to comply with a quarterly reporting requirement of their imported CBAM goods and embedded greenhouse gas emissions,

started on 1 October 2023.

The legislative timeline of the CBAM can be consulted immediately below.

How to pay CBAM?

CBAM tax rate =CBAM tax rate × carbon emissions =(EU ETS carbon price - exporting country carbon price)×(product carbon emissions - free emission credits for EU companies with similar products)

Among them:

EU ETS Carbon Price: The average settlement price of the last week's spot auction

Carbon emissions: including carbon dioxide, carbon monoxide and perfluoride emissions