- The European Union has introduced the Carbon Border Adjustment Mechanism (CBAM) as part of its Green Deal to reduce greenhouse gas emissions by 55% by 2030.
- The CBAM will gradually replace the free allowances provided by the EU Emissions Trading System and will put a fair price on carbon emitted during the production of certain carbon-intensive goods entering the EU to encourage cleaner industrial production in non-EU countries.
- The CBAM will apply to iron and steel, fertilizers, cement, electricity, hydrogen, and aluminium.
- The transitional phase will run from October 1st, 2023, to December 31st, 2025, during which importers can choose reporting methods. From 2026 onwards, reporting and CBAM certificate purchase will be mandatory.
- The first report will be due at the end of January 2024, covering the fourth-quarter data from October 1st, 2023.
- Starting from January 1st, 2025, only the EU method will be accepted.
Source Zampa Debattista
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