- On August 17, 2023, the European Commission approved the Implementing Regulation for the Carbon Border Adjustment Mechanism (CBAM).
- The regulation confirms reporting obligations and provides flexibility in the values used to calculate embedded emissions during the transitional period.
- Companies will have the choice of reporting in three ways during the first year of implementation, and after January 1, 2025, only the EU method will be accepted.
- The regulation also provides for EU-run webcasts and training sessions and offers further guidance on calculating embedded emissions.
- Businesses in the cement, iron, steel, aluminum, fertilizer, electricity, or hydrogen industries should assess how CBAM will impact them.
- The CBAM is a levy on the importation of certain goods into the EU aimed at reflecting embedded carbon emissions resulting from production.
- The approved Implementing Regulation has established good-specific system boundaries and provided industry-specific guidance.
- Default values will only be allowed for up to 20% of embedded emissions after July 31, 2024. The CBAM reporting obligation commences on October 1, 2023.
Source PwC
