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The EU's Carbon Border Adjustment Mechanism (CBAM)

To whom is CBAM really important?

Since October 1, 2023, the European Union has taken a significant step in the fight against climate change with the implementation of the Carbon Border Adjustment Mechanism (CBAM). This mechanism marks a critical shift in EU trade policy and is designed to address the CO2 emissions associated with the production of certain imported goods. In this blog, we explain what CBAM is, who it applies to, and what the implications are for customs declarants and importers.

What is the Carbon Border Adjustment Mechanism?

CBAM is a system established to offset carbon emissions resulting from the production of certain goods outside the EU. The aim is to create a level playing field for companies inside and outside the EU and to ensure fairer competition.

Who Does CBAM Apply To?

CBAM mainly targets importers of specific goods such as iron, steel, cement, fertilizers, aluminum, electricity, and hydrogen. The importer, defined as the person who declares these goods for free circulation within the EU, plays a central role in complying with the new regulations.

Important Changes in Customs Declarations

From the implementation of CBAM, importers of the relevant goods must consider two new codes in their customs declarations:

  • Code 1200: This indicates the reporting obligation for CBAM goods.
  • Code 1300: This is used for goods that are exempted from the regulation.

Failure to enter these codes leads to an error message and non-acceptance of the declaration.

CBAM Quarterly Reporting

During the transition phase, which runs until December 31, 2025, a quarterly report is required. Importers and customs declarants must submit information on the imported quantity and associated CO2 emissions to the European Commission.

What Does 2026 Bring for Importers?

Although there are no financial obligations until 2026, from January 1, 2026, importers must be registered as CBAM declarants and purchase CO2 certificates to offset CO2 emissions.

Stay Informed with Gateway

Gateway continues to follow developments around CBAM and CO2 certificates. We offer software updates to ensure your customs processes run smoothly. For more information, you can always contact Gateway or consult the CBAM website of the EU

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