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“CBAM”, came into force from October 1st 2023.

2023-11-28

“CBAM” (Carbon Border Adjustment Mechanism) means that all importers who bring in certain products from a third country into the European Union must pay compensation for the emissions caused during production.

The regulation obliges importers to prove and document the CO2 emissions of the production chain and offset them by purchasing certificates.

During a transitional period from 1st October 2023 to 31st December 2025 the new regulation will initially apply to a limited extent. This regulation will come into full extent in January 2026.

· The affected sectors are cement, electricity, fertilizers, hydrogen, iron, steel and aluminum

· The data to be collected is complex and extensive and must be verified by the EU

· Direct and indirect emissions (e.g. from preliminary products) must be recorded

· The different production sites must be considered individually - from the raw material to the final product

· Total emissions must be stated in tons of CO2

· These values must be reported in the introductory period one month after the end of the quarter (finally probably at shorter intervals)

· Initially the emissions caused by transport are not relevant but there are plans to include sea freight in the reporting requirement in the short term

· If the requirements are not adhered to, sanctions will be imposed which should be significantly higher than the certificate price