New obligations and penalties for importing goods into the EU: Introducing the Carbon Border Adjustment Mechanism (“CBAM”) to combat climate change.
Starting from 1st October 2023, the Carbon Border Adjustment Mechanism (“CBAM”) established by Regulation (EU) 2023/956, has entered into application in its transitional phase in order to address greenhouse gas emissions contained in goods imported from third countries into the EU customs territory.
This environmental initiative affects businesses established in a Member state that import specific goods into the EU such as cement, electricity, fertilisers, iron and steel, aluminium, hydrogen, and products derived from these goods. During a transitional period from 1st October 2023 to 31st December 2025, importers of said goods must adjust their operations and strategies to comply with new reporting obligations, or otherwise face severe penalties.
Once the definitive (post-transitional) period commences on 1st January 2026, importers will have to apply for the status of authorised CBAM declarant (“application for an authorisation”), prior to importing goods into the customs territory of the EU.