Carbon Border Adjustment Mechanism (CBAM)

In 2019, the European Commission adopted “the European Green Deal”. This strategy brings significant changes to the EU's legislation and vision. Due to the set climate goals, there was actually no escaping these changes. However, the EU is well aware of the economic impact that the “Green Deal” has on EU-based companies and has attempted to mitigate the impact somewhat with the CBAM legislation. This legislation has already been passed in early 2022 and seems to be implemented in the background.

Operation CBAM

The CBAM aims to compensate EU-based companies for the economic impact of the Green Deal on companies that produce elsewhere and export to the EU. After all, these companies are not hindered by the measures that the EU has imposed to guarantee the climate objectives. The EU therefore wants to impose an additional levy on these companies for export to the EU, in the form of emission certificates that will have to be purchased. In principle, the following products (and all derivatives thereof) will be affected by this:

  • Cement
  • Iron and Steel
  • Aluminium
  • Electricity
  • Fertilizer
It cannot be ruled out that the scope of the CBAM will be further expanded to other sectors/product groups.

Date of commencement

The CBAM legislation will come into force on 1 January 2023, with direct effect as a regulation (and not yet transposed into national law as a directive). There will be a transition period of 3 years so that the entire regulation will come into force on 1 January 2026. The emission certificates will therefore only be introduced in the last term of this transition period.

There are still plenty of snags attached to this piece of legislation that will be further crystallized in the coming period. The fact is, however, that both the industry and customs do not have sufficient in-house knowledge for this yet. At Pincvision we are already pre-sorting on the possible effects and it can do no harm to make an inventory of the extent to which your business will be affected by this. If you would like to delve deeper into this matter as a result of this newsletter, you are most welcome for a non-binding dialogue.
25 Oct 2022 at 12:35 pm
2 min
Published by:
Steven Sewberath Misser
Customs Specialist
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