We will assist you with the implementation of the CBAM regulation and prepare you for carbon border tax reporting.
Carbon Border Tax – CBAM
What is CBAM also known as the carbon border tax?
- In July 2021, the European Commission adopted the draft regulation establishing the Carbon Border Adjustment Mechanism (CBAM). In principle, CBAM will be a levy calculated by reference to the greenhouse gas emissions embedded in certain products when they are imported into the EU Union. Based on the emissions of imported products, importers will be obliged to purchase the so-called CBAM certificates. The price of the CBAM certificates will be derived from the price of the emission allowances under the EU ETS.
Who is subject to CBAM?
- All importers of the following commodities and products from third countries: iron and steel, aluminium, cement, electrical energy, hydrogen, fertilisers, selected precursors (such as cathode active materials), and a limited number of so-called “downstream products,” such as screws and bolts.
When and how is it to apply?
- The CBAM Regulation is effective from 1 October 2023, i.e. the start of the so-called transitional period. During this period, importers will only have a reporting obligation on the emissions contained in the imported goods – CBAM-related payments will not yet apply. The transitional period will end on 31 December 2025. As of 1 January 2026, the import of selected goods (see below) will be associated with the obligation to register with a CBAM authority and, upon authorisation, importers will be obliged to declare each year the quantity of goods imported into the EU in the preceding year and their embedded GHG and to purchase the corresponding number of CBAM certificates.
Who will be in charge of the CBAM?
- A central CBAM authority (a single one for the entire EU, not yet introduced) and customs authorities of the individual EU countries.
How will the embedded emissions be calculated?
- The emissions will be calculated by means of methods stipulated by the Regulation and based on information on the actual emissions generated during the manufacturing process provided to importers directly by the third-country manufacturers. Standard emission values will also be available; these will be calculated by the European Commission reflecting the default values of the worst performing EU installations for that type of goods.
How is the data to be reported?
CBAM report
A quarterly report presented during the transitional period – at all times by the end of the month following the end of the given quarter.
The report will contain information on:
- total quantity of goods imported in tonnes or megawatt hours (electricity)
- total actual emissions in tonnes of CO₂ per tonne/megawatt hour
- total actual embedded indirect emissions in tonnes of CO₂ per tonne (not applicable to
- electricity)
- carbon price paid in the country of origin of the goods
CBAM declaration
An annual report presented as of 2026 – at all times by 31 May of the following year.
The report will contain information on:
- total quantity of goods imported in tonnes or megawatt hours
- total embedded emissions in tonnes of CO₂ per tonne/megawatt hour
- total number of CBAM certificates surrendered according to total embedded emissions upon reduction by the carbon price paid in the country of origin, if applicable
How PwC can help
Our team is ready to assist you with the CBAM obligations as follows:
- monitoring of the CBAM legislation and its development
- analysis of potential impact of the CBAM regulation on your company taking into consideration the imported goods, their volume and manufacturing method
- calculation of data for the CBAM reports
- determination of the direct and indirect emissions associated with production
- preparation of quarterly CBAM reports
- obtaining the authorisation to import the monitored products
- preparation of annual reports and administration of the CBAM certificates
Contacts
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