Final regulations published for new EU Carbon Border Adjustment Mechanism (CBAM) and EU Emission Trading System revisions; CBAM transition period begins 1 October 2023
- On 16 May 2023, regulations for revising the European Union Emission Trading System (EU ETS) and the new EU Carbon Border Adjustment Mechanism (CBAM) were published in the Official Journal of the European Union.
- A transitional period will apply for EU CBAM from 1 October 2023 to 31 December 2025, with solely quarterly reporting obligations; from 2026 onward, purchasing CBAM certificates will be required.
- The EU ETS will be extended in the aviation and maritime sectors; new ETS II will cover fuels for transportation and heating.
- Free allowances under the EU ETS will be phased out starting in 2026.
- Businesses (EU and non-EU) are advised to assess the potential impact and prepare for new CBAM reporting obligations starting later this year.
Source EY
