Understanding the Carbon Border Adjustment Mechanism (CBAM) and Reporting Obligations during the Transition Period

• The Carbon Border Adjustment Mechanism (CBAM) is an environmental mechanism designed to support the EU’s goal of carbon neutrality by 2050
• CBAM aims to equalize taxation of domestic and imported products to prevent carbon leakage
• CBAM applies to sectors such as cement, iron and steel, aluminium, electricity, fertilizers, and hydrogen
• During the transition period from 2023 to 2025, importers only need to report embedded emissions without financial adjustment
• From 2026, importers must be authorized CBAM declarants and submit annual CBAM declarations
• Reporting obligation arises for goods listed in specific tariff codes from third countries
• Exceptions to reporting obligation include goods from certain countries, goods under 150 euros, goods in personal luggage, and goods used in military activities
• Importers or indirect customs representatives are responsible for reporting to CBAM during the transition period.

Source: fu.gov.si

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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