EU: Rules for carbon border adjustment mechanism (CBAM) are effective

EU’s rules for new carbon border adjustment mechanism are effective 17 May 2023

EU’s rules for new carbon border adjustment mechanism are effective 17 May 2023

The EU’s rules for the new carbon border adjustment mechanism (CBAM) were published in the official journal of the EU on 16 May 2023 and became effective today, 17 May 2023.

The rules were adopted by the European Parliament on 18 April 2023. Read TaxNewsFlash

Overview of CBAM rules

  • Currently, the CBAM applies to specified imports of goods (identified by their CN code) into the EU within the following six emissions-intensive sectors: electricity, iron and steel, cement, aluminum and fertilizers and hydrogen. Before the end of 2025, an evaluation will take place regarding the scope of the CBAM to consider a possible extension of the list of covered goods.
  • During the transitional period from 1 October 2023 until 31 December 2025, obligations of importers are limited to reporting obligations. Each importer, having imported CBAM goods during a given quarter of a calendar year must, for that quarter, submit a CBAM report containing information on the imported quantity of CBAM goods, the direct and indirect CO2 emissions contained therein (initially indirect emissions only for cement, electric power and fertilizer), as well as carbon pricing already paid in the country of production. The first quarterly report is due by 31 January 2024.
  • CBAM financial obligations take effect from 1 January 2026, under which importers will have to initially register as authorized declarants and start purchasing sufficient emission allowances (CBAM certificates) for imported CO2 emissions. From 1 January 2026, only registered declarants will be allowed to import CBAM goods and an annual declaration obligation applies (i.e., an annual CBAM declaration, in which specific data must be included, including verified embedded emissions). The first annual declaration, covering the 2026 calendar year, is due by 31 May 2027. 
  • Various implementing and delegating acts are expected to be issued in the forthcoming months.

Read a May 2023 report prepared by the KPMG member firm in the Netherlands


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.