With the first reports under the carbon border adjustment mechanism due at the end of January 2024, Agnieszka Kisielewska of MDDP explains the criteria for its application and the reporting obligations for affected importers.

The carbon border adjustment mechanism (CBAM) starts with its transitional phase from October 1 2023 to December 31 2025. The new ‘carbon tax’ covers certain categories of imported goods from outside the EU that have high CO2 emissions involved in their production.

The aim of its introduction is to prevent possible circumvention of EU legislation on combating climate change by importing goods from third countries that do not apply EU measures in reducing greenhouse gas emissions. The mechanism is intended to align the prices of imported goods with the actual carbon intensity associated with them.