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Advicero Nexia | Tax Alert | CBAM in force – new obligations for importers

Dear clients,

we would like to inform you that from 1 October 2023 The European Union has introduced the Carbon Border Adjustment Mechanism (CBAM). This is a new climate policy element in the nature of a ‘carbon’ border tax, which entails new obligations for both importers and indirect customs representatives.

Which types of goods does the CBAM cover?

CBAM does not tax the import of coal, but rather the products in whose production it can be used. The purpose of this mechanism is to equalise the cost of CO2 emissions for goods that are imported into the EU and EU goods subject to the EU Emissions Trading Scheme (EU ETS). The instrument is intended to prevent greenhouse gas emissions from being transferred from the EU to countries with less stringent climate and environmental policy standards.

Transition period

There is a transition period from 1 October 2023 to 31 December 2025 to allow companies and countries outside the EU to prepare for compliance with CBAM requirements. During the aforementioned transitional period, the obligations on businesses are limited to reporting obligations only, including, inter alia, the submission of quarterly reports (referred to as ‘CBAM reports’). This report shall contain information on imported goods during the quarter, no later than one month after the end of that quarter.

From 1 October 2023, importers or indirect customs representatives who import the following products are required to submit quarterly reports:

  • cement,
  • cast iron and steel,
  • aluminium,
  • fertilisers,
  • hydrogen,
  • electricity.

CBAM transition register

A ‘CBAM transition register’ has now been launched to serve as the basis for the establishment of the basic register. During the transition period, this register is intended for: (i) reporting to CBAM and (ii) receiving notifications related to its responsibilities. In Poland, the body designated to manage the CBAM mechanism has been the National Balancing and Emissions Management Centre (KOBIZE).

Traders should note that they will be required to submit the first report on the above-mentioned imported goods by 31 January 2024.

The European Commission has published a link for importers where CBAM reports should be submitted: link. According to the EC, access to the register will be provided by the aforementioned KOBIZE and the platform is expected to be fully operational from the beginning of November this year.

Full implementation of the mechanism

Full implementation of the CBAM mechanism will apply after a transition period, i.e. from 1 January 2026, at which point importers will be required to report annually the quantities of goods imported into the EU in the previous year and the associated GHG emissions and bear the proportionate cost of CBAM certificates and, importantly, only registered operators will be authorised to import CBAM-covered products into the EU. From this point onwards, it will be the authorised traders who will have additional obligations relating to both complying with reporting and ensuring adequate record keeping.

If you are among the entities covered by CBAM and would like assistance in this area, please do not hesitate to contact us.

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