The second quarter of 2024 marked the end of “Phase 1” of the transitional period provided for by EU Regulation 2023/956, which introduced the Carbon Border Adjustment Mechanism (CBAM) starting from last October.
The quarterly CBAM declarations provide a series of information including the emissions incorporated in the products imported during the quarter itself.
Obligations foreseen in “Phase 2”
From the third quarter of 2024 (July-August-September), with the start of “Phase 2”, the possibility of “simplified” transmission of the Report ceases, as a consequence EU importers (CBAM declarants), MUST declare actual emission values, calculated as a ton of CO2 generated for the production of a ton of product according to the methodologies defined in art. 4 of Implementing Regulation (EU) 2023/1773, i.e. the “calculation-based” or the “measurement-based” method.
It is therefore necessary for the non-EU supplier or producer to understand the right approach to calculate the emissions and to properly communicate them to the EU importer, who can then produce the Quarterly Report and send it to the Customs Authorities
What happens if non-EU suppliers communicate unreliable actual data or do not communicate them at all?
On 19 July, the European Commission published an update to the FAQs on the Carbon Border Adjustment Mechanism (CBAM).
It is stated that if registrants are unable to obtain actual emissions data, they must demonstrate that they have made every reasonable effort to do so and use the “comments” box of the CBAM Transitional Registry to provide justifications and include documents attesting the unsuccessful efforts and measures taken to get data from suppliers/producers.
More specifically, #74 aswer reads that if registrants are unable to receive actual emissions data from the supplier and choose to report default values (outside the quantitative limit explained in #75 answer), the CBAM declaration will be considered incorrect/incomplete.
Is there a template to use to prepare the correct declaration?
The European Union has made available a User Manual and some default templates for the different types of imported goods. The use of these templates is not mandatory, as specified in answer no. 19, but it is suggested, as it ensures that all source flows and emission sources and electricity consumption, whcih are relevant for the calculation, are taken into account in the calculation.
How to check if imported products are subject to the CBAM
The European Commission has made available to importers a simple tool to use to understand:
- whether imported products are subject to the CBAM regulation,
- what information is needed to correctly fill out the CBAM Report
- what are the official sources of information on this topic.
The self-assessment tool is included in a simple Excel file, which is filled in by choosing values from the drop-down menus in the cells and which, based on the values indicated, automatically reports whether the Carbon Border Adjustment Mechanism (CBAM) is applicable or not.
For more details on the legislation, FAQs, Guidelines and Models, please refer to this website