Do you have to declare your imported goods?
CBAM Regulations
What is it?
The CBAM, or Carbon Border Adjustment Mechanism, is a new EU regulation that functions as a tariff for the import of certain products into the European Union.
At the legislative level, the CBAM is regulated by two EU Regulations: Regulation 2023/956, published in May, which establishes the Carbon Border Adjustment Mechanism, and Regulation 2023/1773, which sets out the provisions for the transitional period of this mechanism. It entered into force in October 2023, coinciding with the first reporting and notification period.
This Regulation is an integral part of the EU’s Target 55 Package, designed to address carbon leakage in international trade. It also supports the climate change objectives of the Paris Agreement by encouraging the use of cleaner technologies by foreign companies to reduce their emissions.
In terms of emissions legislation, this mechanism complements EU Directive 2003/87/EC, which regulates greenhouse gas emissions trading (ETS), since, by adjusting the level of carbon in imported products, the CBAM reinforces the ETS targets.
What are your objectives?
It establishes the obligation to declare emissions from imported products.
Its main objective is to adjust the level of embodied carbon in imported goods, promoting fair competition and environmental sustainability.
To whom does CBAM apply?
- Importation into the EU Customs Territory
The CBAM applies to certain products imported into the EU originating[1] in third countries* outside the EU, with the exception of Iceland, Liechtenstein, Norway and certain special territories such as Ceuta and Melilla in the case of Spain. - Application on Islands, Structures or Continental Shelf
Its application extends to products introduced on islands, fixed/floating structures or continental shelves. Requires implementing acts to lay down detailed requirements, including customs concepts and controls.
[1] Non-preferential rules of origin according to Article 59 of Regulation (EU) No 952/2013.
- The Regulation does not apply to imported goods subject to CBAM where their value per consignment does not exceed EUR 150 (taking into account all products subject to that consignment[1]).
- The Regulation does not apply to goods used in military activities.
- It does not apply to imports from countries covered by the EU Emissions Trading System (ETS) or from countries with fully linked national emissions trading systems, such as EFTA and EFTA-EFTA countries.
- CBAM covers electricity imports from non-EU countries, unless the third country is so closely linked to the EU internal electricity market that it is impossible to find a technical solution to apply CBAM to these imports. However, this exemption only applies in specific situations and is subject to strict conditions as described in Article 2 of Regulation (EU) 2023/956.
[1] By consignment we mean SAD cleared. One consignment, one SAD.
What kind of products are subject to CBAM?
The CBAM applies to goods listed in Annex I of Regulation 2023/956, originating in third countries. It also includes products processed under the inward processing regime of Article 256 of Regulation (EU) No 952/2013.
The implementation of CBAM will be progressive, starting with imports of goods and precursors known for their high carbon intensity and higher risk of carbon leakage. During the transition period, the products affected include cement, iron and steel, aluminium, fertilisers, electricity and hydrogen.
What is the CN Code?
The CBAM is linked to the CN Code (Nomenclature Code) to identify the products that are subject to this mechanism.
The Combined Nomenclature (CN) is the eight-digit code system of the European Union, which includes the Harmonised System (HS) Code together with other EU-specific subdivisions. The CN Code is used to refer to the tariff code of a product, playing a crucial role in the identification and classification of products in international trade.
What are the implementation periods for this regulation?
TRANSITIONAL PERIOD
01/10/2023 - 31/12/2025-
Transitional registration CBAM
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Quarterly report CBAM
FINAL PERIOD
01/01/2026 to 2034-
Authorised declarant application
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CBAM Registration
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Purchase of CBAM certificates
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Annual CBAM declaration
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CBAM certificate delivery
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Verification by external body
Who can be a declarant?
Import-related responsibilities are assumed by the declarant, who may adopt any of the following identities:
- Direct Importer: importer who files a customs declaration for the release of goods for free circulation in his own name and for his own account.
- EIR Authorisation Holder: person holding an authorisation for Entry in the Declarant’s Register (EIR) who declares the importation of goods.
- Indirect Designated Representative: representative designated by the importer when he agrees to act as declarant for CBAM purposes.
- Indirect Representative (Non-EU Importer): indirect representative when the importer is established outside the European Union (EU).
In the case of indirect representatives whose importers are within the EU, these representatives may be relieved of their responsibilities, but to do so they must notify their importers using the appropriate notification template.
Sanctions
According to Article 26 of Regulation (EU) 2023/956 and Article 16 of Regulation (EU) 2023/1773, penalties will be established as from the entry into force of the Regulation in October 2023 for those reporters who:
TRANSITIONAL PERIOD
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Do not report your emissions.
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Do not submit the report.
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Submit an incorrect or incomplete report and fail to correct it.
FINAL PERIOD
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Do not report your emissions.
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Do not submit the report.
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Submit an incorrect or incomplete report and fail to correct it.
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The declarant fails to deliver the number of CBAM Certificates corresponding to the imported issues.
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Goods are brought into the customs territory of the Union without complying with CBAM obligations.
What are the data for the Calculation of Real Values?
From the third quarter of 2024, the obligation to report quarterly reports based on actual values under the Carbon Baseline Adjustment Mechanism (CBAM) is implemented.
Data for the Calculation of Actual Values:
- CN Codes: Accurate identification of products by their CN codes for accurate classification and allocation of emissions.
- Production Process Identification: Details on production processes for accurate assessment of emissions along the production chain.
- Process Electricity Consumption: Exact amount of electricity consumed at each stage of the production process for accurate calculation of emissions.
- Other Relevant Factors: Additional data such as raw material consumption, changes in machinery, and other relevant factors that influence the carbon footprint.
To comply with CBAM regulatory obligations and to ensure transparency of reporting, suppliers must report the methodology used to calculate the emission factors of CBAM products.
You can download our standard template to complete this reporting.
Do you want specific trainings on CBAM?
Why Tandem HSE?
Quick calculations
In a matter of a few days we can get all the information on the environmental impact of their products in terms of emissions.
Coverage and guarantee
A guarantee is given, in the procedure of calculating the emissions associated with imported products, of compliance with Regulation (EU) 2023/956.
Easy presentation of results
Identification and presentation of direct and indirect emissions from products.
Easiness of calculation with real values
The Tandem HSE team will guide you in gathering information from your source suppliers to calculate the actual values.
End-to-end monitoring
We offer comprehensive monitoring throughout the entire process, from the consultation phase through to processing and delivery, including the accurate calculation of emissions. Tandem HSE can be appointed as a third party to carry out the process on your behalf, simplifying your compliance process and ensuring efficient management of your CBAM obligations.
Updated databases
A comprehensive and extensive database is available and updated annually with data from the National Markets and Competition Commission (CNMC), the Government and EcoInvent.
Frequently asked questions
In the case of installations or operators located in third countries, the CBAM regulations also apply, and they must comply with the corresponding obligations.
Competent authorities vary according to the context, but in the framework of the CBAM, it refers to the authorities in charge of the administration and supervision of the system, which may vary from one country to another within the European Union.
Yes, amendments and corrections to CBAM reports are allowed within a specific timeframe after each quarter. However, it is important to comply with the requirements and deadlines set for these modifications.
Incomplete or incorrect reporting may result in negative consequences, such as sanctions or reviews by competent authorities. It is important to ensure the accuracy and completeness of CBAM reports.
The Transitional CBAM Registry is interoperable with electronic systems and processes related to carbon emissions reporting and monitoring, which facilitates the integration of information and data in the framework of the EU’s Carbon-Border Adjustment Mechanism (CBAM). This enables the sharing of relevant information and ensures compliance with CBAM regulations.
In the event of a temporary failure of the Registry’s electronic portal systems, it is important that the competent authorities take steps to restore the functionality of the system as soon as possible. During a failure, reporting and other CBAM-related operations may be affected. However, the regulations usually set deadlines for reporting, so it is important to comply with these deadlines even in case of temporary failures, and to notify the relevant authorities of any technical difficulties.
From the European Commission
For each quarter from 1 October 2023 to 31 December 2025, the reporting reporter shall submit CBAM reports to the CBAM Transitional CBAM register (CBAM TR) no later than one month after the end of that quarter.
During the transitional period, importers of CBAM goods do not need to obtain special authorisation to import these products into the EU. Customs authorities will inform importers of their reporting obligations at the time of import.
They do need to register in the CBAM Transitional Register in order to be able to submit the quarterly CBAM report.
No, verification by an external independent body will only be mandatory from 2026.
Non-EU producers must provide data on emissions embodied in CBAM products to EU importers. If this information is not available at the time of import, importers can use default values to calculate emissions. In addition, non-EU production facilities can register to facilitate emissions reporting, simplifying compliance for importers of CBAM products from these facilities.
A carbon price is the amount of money paid in a third country as part of a carbon emissions reduction programme. It can take various forms, such as taxes, fees or emission allowances in a greenhouse gas emissions trading system.
Customs authorities shall not permit the importation of goods by any person who is not an authorised declarant for the purposes of CBAM.
The CN codes of my imported products can be found in the SADs cleared during the quarter under obligation. In addition, it is also possible to find them in the product sheets, consult customs or contact the manufacturer directly.
The De Minimis exemption applies considering both the total value per shipment and the total value of different CN codes in one shipment. In other words, if in one shipment you import two products with different CN codes for a total value (between the two products) of €150, you must report it. Only if the total value of those products is below €150, then you do not need to report it.
Examples:
- Case 1: In your shipment, you have X products not subject to CBAM, each with a nominal value of Y euros. They are not relevant for the application of the De Minimis exemption. You also have a transport container of Portland cement identified by its CN code (2523 21 00), and its total value does not exceed EUR 150. The De Minimis exemption still applies, i.e. you do not have to declare it.
- Case 2: In your shipment, you have X goods not subject to CBAM, each with a nominal value of Y euros. They are not relevant for the application of the De Minimis exemption. You also carry one tonne of white Portland cement (CN code 2523 21 00) and one tonne of other Portland cement (CN code 2523 29 00). The value of each CBAM-covered product is EUR 120. The total value of the products subject to CBAM in your shipment exceeds €150.
No, quarterly CBAM reports must be submitted when imports of any of the CBAM products (products listed in Annex I of Regulation (EU) 2023/956) have taken place during the relevant quarter.
As from 1 February, in the CBAM Transitional Registry, declarants can use the ‘Request Delayed Submission’ function to obtain an additional 30 days. They should select ‘Requested by Declarant (technical error)’. Late submissions due to technical problems are considered justified, with no negative consequences. Submission is encouraged as soon as the technical problems are resolved.
- Use the direct link to the CBAM Transitional Registry: https://cbam.ec.europa.eu/declarant/
- Before accessing, please clear your browser cache, restart your browser or use incognito mode.
- If problems persist, this may be due to system upgrades, which can cause temporary outages. It is recommended that you try again after a reasonable time.
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