Which goods fall under the CBAM?
From the transition period of October 1st, 2023, until December 31st, 2025, you must indicate your carbon footprint for the following imported goods:
- Iron (ore)
- Steel
- Aluminium
- Hydrogen
- Cement
- Fertilizer
- Electricity
The above categories are just main products. For example, bolts and nuts also fall under iron. From 2025, the EU may expand this group of goods with polymers (plastics) and chemicals.
Are you required to report for the CBAM?
You are obliged to report if you are established in the European Union and import (any of) the above products. If you are not established in the EU, the indirect customs representative is the reporting agent.
When does the CBAM really come into effect?
The following timeline applies to the actual implementation of the CBAM:
- October 1st, 2023: start of CBAM transition period;
- December 31st, 2025: end of CBAM transition period;
- January 1st, 2026: legal implementation of CBAM.
Where do you report for CBAM?
During the transition period, you report your carbon footprint in your quarterly reports to the EU. Your reporting obligation depends on the GN product code that your imported goods have.
Who monitors whether you comply with your reporting obligations?
During the transition period, the Dutch Emission Authority supervises. In addition, customs will notify you of your reporting obligation after October 1st, 2023. Failure to comply with your reporting obligation may result in fines.
What does the CBAM look like from January 1st, 2026?
Importing the above goods involves buying emission certificates. From January 1st, 2026, you must submit your annual declaration by May 31st of the following year and surrender the emission certificates corresponding to this carbon footprint. By that time, you must report on the CBAM trading portal that is yet to be developed.
What has preceded this?
On May 25th, 2023, the Dutch State Secretary of Finance submitted an amendment note to the Dutch House of Representatives proposing the implementation of the Carbon Border Adjustment Mechanism (CBAM) based on the above lines.
On June 13th, 2023, a draft implementing regulation was published at the European level, containing the reporting requirements where importers must report.
What data do you need to report according to the draft implementing regulation?
The amount of data you need to report is hefty, with 165 items in total. The most important are:
- The quantity and GN code of the imported goods.
- The country of origin.
- The details of the production location of the imported goods (including geo-location data).
- The production route.
- The direct and indirect emissions.
- The CO2 levy and any discounts/refunds on that levy already paid in the country of origin.
Over the first two reporting periods, the draft implementing regulation provides for the possibility of correction and regulation of any fine for non-compliance with your reporting obligation during the transition period (between 10 and 50 euros per ton of unreported CO2). In addition, this draft includes a proposal for detailed rules on embedded emissions that you must report and the use of standard values.
Prepare well for the CBAM!
Before the start of the transition period, 1 October 2023, the final implementing regulation will be published first. The obligations, requirements, and reporting methods are not yet final.
Even though this legislation is not yet final, it is still important that you start mapping out your CBAM obligations and inform your foreign suppliers about the information you need from them to comply with your administrative and reporting obligations. This is a lot of work. We can help you with that.
Contact one of our specialists
