Everything you need to know about CBAM

What is CBAM?
CBAM stands for Carbon Border Adjustment Mechanism, or emissions correction at Europe's external border. The CBAM regulation is a new instrument introduced by the European Commission as part of the drive for a more sustainable economy. CBAM supports the operation of the European Emissions Trading Scheme (EU ETS).

Why CBAM?
The CBAM is designed to correct emissions generated during the production of goods outside the EU when they are imported into the EU. Its purpose is to help prevent European companies from moving their production to countries with less stringent CO2 regulations while ensuring fair competition between European companies and those outside the EU. This is necessary because many European companies face strict rules about their CO2 emissions and/or have to pay for their CO2 emissions.

How does CBAM work?
CBAM applies to goods in the categories: iron and steel, cement, fertilizers, aluminum, electricity and hydrogen. Anyone importing these "CBAM goods" with a value above €150 per shipment into the European Union will be required to report how much CO2 was emitted in the production of those goods from October 2023.

CBAM will be phased in: from October 2023 to December 2025, CBAM will be subject to a transition period. During this period, the amount of CO2 emitted in the production of imported CBAM goods must be reported quarterly. No other obligations apply yet. This transition period is intended to gain experience and to learn. By gaining knowledge and experience, all stakeholders can prepare well for CBAM from 2026.

CBAM from 2026: Additional obligations under the CBAM will apply from January 1, 2026. Pre-registered importers must start paying a price for CO2 emitted in the production of imported CBAM goods starting this year.

How can you comply with CBAM?
At Rotra, our in-house customs department specializes in assisting our customers in complying with CBAM regulations.

-Goods classification: reviewing your goods classification to determine if/which of your products are covered by CBAM regulations
-Origin documentation: verify the origin of your goods to determine if they are covered by CBAM
-CBAM reporting: Rotra has developed a reporting system with all CBAM transactions handled by Rotra on behalf of your company for the purpose of simple and quick completion of the CBAM register. You will automatically receive these periodically from us with you determining the frequency (monthly or quarterly).

For more information on CBAM or for full guidance on your CBAM reporting please contact us.