On 17 August, the European Commission adopted the rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase. This phase will start on 1 October and runs until the end of 2025. The Regulation entails the transitional reporting obligations for EU importers of CBAM goods, as well as the transitional methodology for the calculation of embedded emissions released during the production process of CBAM goods. During the CBAM’s transitional phase, traders will only have to report their imports emissions, but will not have to pay any financial adjustment. This will ensure an adequate timeframe for businesses to adjust, while also allowing the definitive methodology to be improved by 2026. The first report will have to be submitted by 31 January 2024. In order to help importers as well as third country producers, the Commission also published guidance for EU importers and non-EU installations regarding the practical implementation of the new rules. CBAM is the EU’s landmark tool to fight carbon leakage and is one of the main pillars of the EU’s Fit for 55 Agenda.
Source: etaf.tax
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