What is CBAM?
The Carbon Border Adjustment Mechanism (CBAM) is a political instrument of the European Union (EU) that aims to make international trade fairer and increase the incentive for companies to reduce their emissions. CBAM relates to the import of goods into the EU and refers to the CO2 emissions generated during the manufacture of these imported products.
Goals:
- Promotion of environmental standards: CBAM should ensure that companies that produce in the EU and comply with high environmental standards are not placed at a competitive disadvantage compared to companies from countries with lower environmental standards.
- Reducing greenhouse gas emissions:The instrument is part of the EU’s strategy to achieve its climate targets and aims to encourage companies to reduce their emissions.
How does CBAM work?
CBAM taxes imports to Europe or imposes costs on them based on the CO2 emissions generated during the manufacture of the imported products. This measure is intended to ensure that companies inside and outside the EU bear comparable burdens when it comes to the fight against climate change.
In the wake of the Russian invasion of Ukraine, the EU has imposed further sanctions against Russia, which will have a direct impact on the import of goods, affecting many importers.
Article 3g of Council Regulation (EU) No. 833/2014 was amended as follows
a. Paragraph 1 letter d is replaced by the following:
“(d) to import or purchase, directly or indirectly, iron and steel products listed in Annex XVII after September 30, 2023, if they have been processed in a third country using iron and steel products listed in Annex XVII originating in Russia
;
for products listed in Annex XVII which have been processed in a third country using steel products falling within CN code 7207 11 or 7207 12 10 or 7224 90 originating in Russia, this prohibition shall apply from April 1, 2024 for CN code 7207 11 and from October 1, 2024 for CN codes 7207 12 10 and 7224 90;
for the purposes of the application of this point, importers shall provide, at the time of importation, proof of the country of origin of the iron and steel inputs used for the processing of the product in a third country;
“
In brief, we understand the regulation as follows:
All products manufactured from materials listed in Annex XVII (including almost all items of Chapter 72 and products of Chapter 73) originating in Russia may no longer be imported.
Which products are affected?
| Cement: | 2507 00 80; 2523 10 00; 2523 21 00; 2523 29 00; 2523 30 00; 2523 90 00; |
| Current: | 2716 00 00; |
| Fertilizer: | 2808 00 00; 2814 .; 2834 21 00; 3102..; 3105..; |
| Iron and steel: | 72 (except: 7202 2, 7202 30 00; 7202 50 00, 7202 91 00, 7202 92 00, 7202 93 00, 7202 99, 7202 99 10, 7202 99 30, 7202 99 80, 7204); 2601 12 00; 7301; 7302; 7303 00; 7304; 7305;| 7306; 7307; 7308; 7309 00; 7310; 7311 00; 7318; 7326; |
| Aluminum: | 7601; 7603; 7604; 7605; 7606; 7607; 7608; 7609 00 00; 7610; 7611 00 00; 7612; 7613 00 00; 7614; 7616; |
| Chemicals: | 2804 10 00; |
| Future: | More products to follow |
The obligation to notify exists for each notifier (usually the importer) and must be submitted for the period 01.10.2023 to 31.12.2023 for the first time on 31.01.2024.
Further information:
https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en?prefLang=de&etrans=de
