Carbon Border Adjustment Mechanism (CBAM) – Compliance and cost transparency for your imports into the EU

The Carbon Border Adjustment Mechanism (CBAM) is changing the requirements for companies that import energy-intensive goods into the EU: the EU Emissions Trading System is being supplemented by a carbon border adjustment and extended to imported goods. This has significant implications for businesses. Our industry-experienced experts support you with CBAM management from planning to implementation, and from reporting to data management.

What companies now need to document in relation to CBAM management

The EU’s aim with the CBAM is to prevent carbon leakage – that is, the relocation of carbon-intensive production to countries with lower CO₂ costs – and to create a level playing field between manufacturers within and outside the EU. Since the start of the transition period on 1 October 2023, a quarterly reporting obligation has been in force: affected importers must document and report the quantities imported into the EU, as well as the direct and indirect CO₂ emissions contained therein and, where applicable, any CO₂ taxes already paid in the country of manufacture. The product groups initially covered include, amongst others:

Cement,
electricity,
fertilisers,
aluminium,
iron,
steel,
hydrogen,
as well as certain upstream and downstream products.

As the CBAM enters its final phase, the requirements will become significantly more extensive: establishing a robust emissions data foundation, greater involvement of suppliers, and preparation for future reporting and verification requirements. We can advise you or undertake the verification of your emissions data or that of your suppliers.

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The consequences of breaching CBAM regulations

In practice, data collection presents many companies with complex challenges: often, there is no reliable overview of which products are imported from where – yet this transparency is essential for capturing emissions throughout the supply chain.

Furthermore, the cooperation of non-European suppliers is crucial, as CBAM is fundamentally based on actual figures and missing data can only be replaced by default values to a limited extent. Although official default values exist to temporarily fill gaps where suppliers fail to cooperate, these may only be used without restriction until July 2024. Violations of reporting obligations or inaccurate reporting may, in turn, lead to fines.

Companies under pressure to act: CBAM implementation phase begins – requirements are increasing

With the transition from the reporting phase to the implementation phase, the requirements are becoming significantly more demanding: companies must establish governance structures, processes and digital data flows at an early stage and organise their collaboration with global suppliers in such a way as to ensure the necessary transparency regarding production steps, intermediate products and energy use. At the same time, rising energy and CO₂ costs, as well as complex regulatory frameworks, are impacting energy-intensive companies. Our experts support you in complying with regulatory obligations, designing efficient processes and better managing cost implications.

How we support your business

Comprehensive advice on CBAM management – from internal organisation and process design to integration into existing compliance and financial processes
Efficient and legally compliant implementation of CBAM requirements in line with regulatory guidelines
Calculation of CBAM emissions data and verification of plausibility and completeness
Support with preparing for the verification of supplier data, including identifying and promptly closing data gaps