- The Carbon Border Adjustment Mechanism (CBAM) is a regulation implemented by the EU to mitigate carbon leakage and encourage global carbon pricing.
- The CBAM requires importers into the EU to pay a financial adjustment for emissions released during the production of certain carbon-intensive goods in third countries.
- South African businesses are subject to a quarterly reporting obligation during the transitional phase of the CBAM.
- SA exports of goods such as cement, electricity, fertilizers, iron and steel, aluminum, and chemicals are at risk under the CBAM.
- The price of carbon in South Africa differs significantly from the price of EU emissions allowances, so importers of CBAM-covered goods from South Africa will have to buy and submit CBAM certificates for compliance.
- SA exporters of CBAM goods will need to provide information for quarterly reporting, including quantity of goods, emissions, country of origin, production site, and carbon price paid.
- SA exporters can leverage the National Greenhouse Gas Emission Reporting required by the Department of Forestry, Fisheries, and the Environment to fulfill CBAM reporting requirements.
- Full reporting according to CBAM-specific methodologies will be required from 1 January 2025.
Source: taxathand.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
