Newsroom, VAT | 22. December 2022

EU reaches agreement on CBAM

The European Parliament and the Council of the EU reached an agreement on Tuesday 13 December 2022 on the Carbon Border Adjustment Mechanism (CBAM) published in July 2021. by

The main objective of this legislation is to align the price of carbon paid for EU products under the EU Emissions Trading Scheme (ETS) with the price of imported goods. Accordingly, companies importing into the EU are obliged to purchase so-called “CBAM certificates” to pay the difference between the carbon price paid in the country of production and the price of carbon certificates in the EU ETS.

The new regime will apply from 1 October 2023, but with a transitional period during which the importer’s obligations will be limited to reporting. The CBAM will apply to iron and steel, cement, aluminium, fertilisers and electricity, as proposed by the Commission, and will be extended to hydrogen, indirect emissions under certain conditions, certain precursors, as well as some downstream products such as screws and similar iron or steel articles.


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