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What is CBAM, and why is it being introduced?

CBAM (Carbon Border Adjustment Mechanism) is a new tool developed by the European Commission to address the issue of climate change from a customs and taxation perspective.

This article is designed to provide a clear breakdown on CBAM, from information published by the European Commission. This includes:

  • CBAM Registry
  • Areas affected by CBAM
  • Reporting
  • Training and Guidance
  • A timeline for CBAM for importers

CBAM was introduced as a method of dealing with carbon leakage, to put a fair price on carbon emitted during the production of carbon intensive goods entering the EU.

What is ‘carbon leakage’?

A method by which companies move carbon-intensive production to countries with less stringent climate policies than those in place in the EU, as a cost-saving measure.

CBAM is aligned with the phase-out of allocation of free allowances under the EU Emissions Trading System (ETS) to support decarbonisation of EU industry. CBAM ensures the carbon price of imports is equivalent to domestic production, and that the EU’s climate objectives are not undermined.

The tool is designed to be compatible with WTO-rules.

CBAM Registry

The following information is supplied by the European Commission:

Provisional list of National Competent Authorities (CBAM)

The upcoming implementation of CBAM will require the involvement of the National Competent Authorities (NCAs) of the 27 Member States from 1 October 2023.

The NCAs will in particular be responsible for granting authorisation to the importers established in their Member States to access the CBAM Transitional Registry. This Registry will become accessible to reporting declarants and all competent authorities in the EU once it goes live on Sunday 1 October 2023. It will become fully operational by early November 2023, in plenty of time for importers to submit their first reports by the deadline of 31 January 2024.

The list of NCAs will be regularly updated on this page as they are notified to the Commission and will also be made available in the CBAM Transitional Registry. The publication of this list in the Official Journal will take place at the end of October 2023

In Ireland, the National Competent Authority is Environmental Protection Agency.

What will CBAM affect?

Initially, CBAM will apply to imports of goods that present a significant risk of carbon leakage, namely:

  • Cement
  • Iron and steel
  • Aluminium
  • Fertilisers
  • Electricity
  • Hydrogen

When it is fully phased in, CBAM will capture more than 50% of the emissions in ETS covered sectors.

  • During the transition period, importers of good in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in the imports Direct and Indirect without making any financial payments or adjustments.
  • After the transition period, Indirect emissions will be covered for some sectors (cement and fertilisers) on the basis of defined methodology in the Implementing Regulation published on 17 August 2023.

A review of CBAM’s functioning will take place during its transitional phase. The report will include a timeline setting out the inclusion, by 2030, of other goods produced in sectors covered by the EU ETS.


Until the end of 2024, there will be three ways to report under CBAM.

  1. Full reporting according to the new methodology (EU Method)
  2. Reporting based on an equivalent method (three options available)
  3. Reporting based on default reference values (only until July 2024)

As of 01 January 2025, only the EU Method will be accepted.

The Commission notes that estimates (including default reference values) can only be used be used for complex goods if they represent less than 20% of the total embedded emissions. The default values are due to be published by the Commission by the end of 2023.

The report from the EU’s Joint Research Centre (JRC), Greenhouse gas emissions from manufacturing: what difference across countries?, will feed into the values.

IT and Training Developments by the Commission

As part of the introduction of CBAM, the Commission has developed IT tools and training materials to assist importers. This includes tools to help perform and report calculations.

The guidance, training and tutorials provided include:

A Timeline for Importers

Below is an approximate timeline for importers, to be made aware of significant dates and periods during the introduction and implementation of CBAM.

  • 2023, October 01: CBAM is introduced. Importers are required to begin collecting data.
  • 2023, December 31: Deadline for the publication of default values for reporting by the Commission.
  • 2024, January 31: The first reporting period concludes.
  • 2025, January 01: Only the EU method of reporting will be accepted.
  • 2026, January 01: The permanent system enters into force.

After this date, EU ETS will begin to be phased out, and CBAM will be phased in. This period will last from 2026 through 2034.

  • 2030: A report will be published including a timeline for the inclusion of other goods in sectors covered by EU ETS.
  • 2034: CBAM will be fully implemented.

This page last updated 27 November 2023.

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