In March of this year, we announced through our Sustainability Insight that the CBAM (Carbon Border Adjustment Mechanism) regulation on the emission import tax will have to be paid by companies importing certain goods in the EU. As a reminder, the insight article can be found here. As you know, these regulations enter into force on 1 October 2023 and must be reported on by 31 January 2024 at the latest.


On the 16th of May 2023, the CBAM regulation has been published in the Official Journal of the European Union.

A gradual phasing in of CBAM will allow for a careful, predictable and proportional transition for EU and non-EU businesses, as well as for public authorities. A defined methodology is outlined in the Implementing Regulation published on 17 August 2023. During this transition period, only direct and indirect greenhouse gasses need to be reported on.

During the first year of implementation, an organisation can choose between three ways of reporting: 

1) full reporting according to the new methodology (EU method) , 

2) a report based on the equivalent system in the country of origin, and 

3) reporting according to reference values.  As of 1 January 2025, only the EU method will be accepted.

Once the permanent system enters into force, the quantity of goods imported into the EU will need to be declared as will be their greenhouse gas emissions. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances. Eventually, in the period 2026-2034, the EU ETS (Emissions Trading System) free allocations of allowances will phase-out and at the same time CBAM will phase-in.

All companies will need to have an in-depth knowledge of their production process and the accurate carbon footprint, for this will have an immediate impact on the carbon import tax. Hence the importance of having excellent metering, monitoring and carbon cost calculation.

What if you do not report?
The EU has foreseen penalties, the amount shall be between 10€ and 50€ per tonne of unreported emissions and shall be increased with the European index of consumer prices.  Better safe than sorry. 
Should you need guidance on how to calculate your carbon footprint and the cost of the allowances, or how to set up this CBAM, our experts are available.