On 17 August 2023, the EU Commission adopted the implementing regulation regarding the reporting rules applicable during the transitional phase of the Carbon Border Adjustment Mechanism (CBAM).
The CBAM formally entered into force on 17 May 2023. It requires importers to report the so-called ’embedded emissions’ of certain (mostly industrial) products and of electricity imported into the EU in order to ensure equivalent carbon pricing for imports and domestic (i.e., EU) products and electricity. A transitional phase will run from 1 October 2023 until 31 December 2025, during which only reporting obligations – but no carbon pricing – will apply. Carbon pricing will start applying as of 1 January 2026.
The recently adopted implementing regulation sets out the transitional reporting obligations for EU importers of CBAM-covered goods, as well as the transitional methodology for calculating the greenhouse gas emissions released during their production process that will count as embedded emissions.
Source: insightplus.bakermckenzie.com
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