Hot Spot EU Carbon Border Adjustment Mechanism (CBAM) Declarations

What is it?

In an attempt to reduce CO2 emissions, the EU Emission Trading Scheme (ETS), a market mechanism to trade greenhouse gas emissions, was introduced. It is recognised that importing goods from outside the EU effectively removes EU greenhouse gas direct emissions but does nothing to reduce global emissions.

CBAM aims to capture the carbon “leakage” from imported sources. There is a progressive implementation which starts with quarterly declaration of CO2 content of steel and aluminium products. The first declaration is due by the end of January 2024, reporting on Oct-Dec 2023.

  • The current scope includes iron and steel, and aluminium.
  • There will be extensions.
  • CBAM reporting declarants (eg importers who lodge customs declarations) are required to submit quarterly reports giving details of country of origin per production site, direct and indirect emissions. Default values can be used for a short time along with estimations.
  • The regulation enters force on 1 Jan 2026 when importers will need to
    a. Obtain authorisation.
    b. Declare annual quantity of CBAM goods
    c. Surrender CBAM certificates to cover emissions
  • All goods over a value >€150 in scope are covered
  • There does not appear to be a check on accuracy
  • Each EU country has its own scheme for reporting
  • The full supply chain is involved – EG a valve manufacturer has to report on its suppliers (eg fasteners) and they have to report on theirs (fastener made in India, using steel from China etc.)
  • This is customs paperwork – so the entity doing the customs paperwork has to do the reporting


Why is it important?

A significant burden of maintaining data and reporting is required by these requirements. The UK has also announced that it will implement a UK CBAM by 2027 which is likely to mirror the EU version. It is consulting during 2024. The reporting of this data will be compulsory in the future.


Continuous Improvement - Did we miss anything?

Hot Spots are intended to alert members and provide a brief overview of new standards, activities or procedures that are being introduced in the industry. If there is key information missing that would be helpful, please let us know so that we can improve our future service.

Please Note: This Hotspot is for information purposes, and we invite comments from BVAA members only. Please also note that at time of publication ballots may be closed. For more information, please contact the Secretariat.

BVAA Members: Did you know we have a hotspot tab on the BVAA website? Head over to www.bvaa.org.uk/login-here.asp and log into the member only area. You then need to select ‘Hotspots’ for the latest. For information on how to access the member only area of the website please contact jane@bvaa.org.uk


Published: 26th February 2024

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