The Carbon Border Adjustment Mechanism (CBAM)

On 1 October 2023, the European Union’s Carbon Border Adjustment Mechanism (CBAM) came into force. The CBAM complements the EU Emissions Trading System (EU ETS) by setting a carbon price for imported goods and introduces a number of reporting and compliance obligations for importers of goods into the European Union. Under the CBAM Regulation, importers of certain goods must regularly report on the emissions contained in the goods they import into the EU. We support your company throughout the entire process so that your company is prepared and can fulfil all obligations.

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Information on the CO2 border adjustment mechanism
Regular reporting on current developments on the CBAM, tailored to your company.
Obligations of your company and supply chain
Identification of your company’s and supply chain’s activities affected by the CBAM. Detection of resulting obligations (e.g. reporting, creating points of contact, provision of data, CO2 accounting of imports, submission of certificates).
Integration of the necessary processes in the company
Support in integrating your obligations into your operational organisation (e.g. communication, data flows, compliance cycle taking into account in-house processes). Development of the necessary process and communication structures with your trading partners, manufacturers and exporters.
Procurement strategy
Evaluation of various procurement and hedging options for CBAM certificates from a strategic, commercial and organisational point of view.
Strategic orientation of your company
Analysis of the impact of CBAM on your business model (e.g. market environment, technological options, price sensitivity of your customers) and design options (adaptation of the supply chain based on climate indicators). Development and evaluation of different scenarios.
Implementation and evaluation
Support during implementation, evaluation and adaptation to changed framework conditions.

Your contact

Hendrik Schuldt

FAQs

What is the Carbon Boundary Adjustment Mechanism (CBAM)?

The EU Carbon Border Adjustment Mechanism (CBAM) is a European Union policy tool designed to address carbon leakage and promote carbon pricing in the context of international trade. It’s essentially a measure aimed at ensuring that imported goods face a similar carbon cost as domestically produced goods, thereby preventing carbon leakage, which refers to the situation where industries relocate to regions with less stringent environmental regulations to avoid higher costs associated with carbon emissions. CBAM is implemented beginning in 2023 and the European Union will price CBAM allowances in line with the price level in the European Emissions Trading Scheme (EU ETS) from 2026.

Which energy and climate targets has the EU set for itself?

In the EU Green Deal and the Fit for 55 package, the EU has set itself ambitious energy and climate policy goals. The share of renewable energies in final energy consumption is to increase to 40 percent by 2030 and even to 45 percent according to the new REPowerEU strategy to reduce import dependence on Russian fossil fuels. Greenhouse gas emissions are to fall by at least 55 percent by 2030 compared to 1990. By 2050, the EU is to be climate neutral.

What is the EU ETS?

The European Emissions Trading Scheme (EU ETS) has been the EU’s central climate protection instrument since 2005- and covers about 40 % of the EU-wide greenhouse gas emissions. It aims to reduce greenhouse gas emissions in the participating energy sector, energy-intensive industry, aviation and shipping. The EU ETS works according to the principle of “cap & trade”. A cap determines the total amount of greenhouse gas emissions that may be emitted by installations subject to emissions trading. The emission allowances can be freely traded on the market. This creates a price for the emission of greenhouse gases. This price creates incentives for the participating companies to reduce their greenhouse gas emissions.

How high should the emission reductions in the EU ETS be?

The emission reductions of the sectors and industries in the EU ETS are to fall by at least 62 percent by 2030 compared to 2005. By 2020 the emissions in the EU ETS have already been reduced by 21 percent compared to 2005.

What is the EU ETS II?

The details of a new and second emissions trading system (EU ETS II) are currently being negotiated at the EU level. The EU ETS II will require fuel distributors in the road transport and building sectors across the EU to participate and will put a price on emissions in these sectors from 2027 onwards.

Does carboneer also offer greenhouse gas accounting services?

Together with our partners, we also provide accounting services for internal and external greenhouse gas emissions (Scope 1-3) for selected clients.