Recap: What you missed in the latest EU Commission CBAM webinar

Missed the 19 June CBAM webinar hosted by the EU Commission? We’ve got you covered. With over 5,000 people tuning in, it’s clear that the Carbon Border Adjustment Mechanism (CBAM) remains a hot topic as importers and installations navigate the tightening requirements.

Here’s a quick rundown of what you need to know to stay ahead.

CBAM: Shaping the future of emissions reporting

CBAM is transforming how we measure and verify emissions globally. The Commission is clear that it’s not about targeting countries; it's about holding producers accountable. Accurate data collection, including indirect emissions, is more important than ever, to correctly price and effectively reduce emissions. The Taxation and Customs Union (DG TAXUD – also referred to as the ‘CBAM Campaign Team’) is pushing for this to ensure robust emissions calculations across the board.

Ultimately, the goal of CBAM is to remove the need for CBAMs: to transition to a world where emissions transparency and decarbonization are embedded into trade, procurement and manufacturing across high-emitting sectors.

High-level progress

Remarkably, 90% of imports are handled by just 10% of declarants, so simplifying reporting is key. The EU is seeing 60,000 reports per quarter and is pretty satisfied with the coverage. Come October, we can expect a deeper dive into these reports as real primary data starts flowing in.

Currently, 95% of CBAM declarations use default values. But sectors like cement are ahead, with 40% providing actual emissions data.

It’s clear that experience in emissions reporting, along with factors like country of origin and exposure to carbon regulation, play a big role. EU-neighbour countries as well as large trade partners including the US, UK and China have provided more data. Other trade-specific examples, such as aluminium from Mozambique showed good volumes of primary data.

Streamlining for the definitive period

From October 2024, importers must ditch default values for real data. This move aims to tackle data collection challenges and improve the accuracy of emissions reporting. The definitive system will make the process easier with mandatory verification of installation emissions starting in 2026.

• ‍Read our recent article on the challenges and solutions to primary data gathering, and the EU’s approach to penalties.

Global Developments

CBAM’s impact on developing countries and Least Developed Countries (LDCs) is significant. They noted that the G7 Climate Club is also looking at how to support those impacted.

The Commission is optimistic about the developments of other CBAMs, including the UK and Australia who are wrapping up their CBAM consultations – a global approach is definitely taking shape.

For Importers: What you need to know

• De Minimis Rule: EUR 150 threshold might be amended, with discussions ongoing about its application (see our recent piece in The Manufacturer about the challenges here).
• Non-Compliance: The CBAM team has been focusing on identifying non-reporting reasons like technical issues or lack of awareness to date, but penalties are intended for importers who fail to make declarations.
• Error Feedback: Feedback is provided to help importers correct mistakes during the transitional period.
• Outreach Campaigns: Campaigns in third countries aim to boost understanding and compliance among producers, to help importers with supplier engagement challenges.

For Installations: Key updates

• Confidentiality Issues: A new registry module by early 2025 plans to let exporters submit sensitive data directly. This information will be used for emissions estimates but won’t be visible to importers.
• Verification in 2026: Verification becomes mandatory in 2026 with guidance on verification requirements released by end of 2024.

Upcoming Dates to Remember

• End of 2024: Report on extending CBAM to downstream products and conditions for becoming an Authorized CBAM declarant.
• Mid-2025: Calculation of emissions at installations, carbon price and certificates as well as technical amendments to the regulation.
• 2026 Onwards: Buy CBAM certificates on a central platform. Ensure 80% quarterly coverage. Prices align with ETS allowances, further guidance on this to be released.

Q&A Highlights

• ‍Why can’t customs authorities provide import data? Customs declarations lack specific CBAM-required info. Traders must report this.‍
• How to handle non-EU reporting? Non-EU entities must use an indirect customs representative for reporting.‍
• Buying CBAM certificates? From 2026, certificates are bought on a central platform. Ensure 80% quarterly coverage. Prices match ETS allowances.‍
• Using Ecoinvent database? For July 2024, recommend to stick to default values published by the EU, as Ecoinvent isn't aligned to CBAM methodology.

Get prepared as CBAM rules tighten

The EU Commission’s webinar provided critical updates on CBAM's evolution and what businesses need to do next. As the definitive period approaches, staying informed and compliant is essential.

At CarbonChain, we simplify CBAM data gathering and reporting, and provide a knowledge hub for importers and installations.

Use our CBAM reporting tool for free until October and join our webinar on 26 June for more insights.