EU CBAM: New rules for importers

CBAM – what new regulations?

The European Commission has prepared two draft implementing regulations concerning CBAM:

• on the procedures for obtaining the status of an authorised declarant of the carbon dioxide border correction mechanism, and
• on the establishment of the CBAM register.

The first regulation specifies the rules for granting the status of an authorised CBAM declarant and is to enter into force on 24 December, while the second focuses on the implementation of the CBAM register information technology (IT) system and is to enter into force on 1 January 2025.

CBAM Register – what is it?

In principle, the CBAM register is intended to serve as an electronic database for the submission and management of CBAM declarations. Currently, importers use the CBAM transition register, which allows for the submission of quarterly CBAM reports and communication with CBAM authorities.

The CBAM register will contain data on:

• authorized CBAM declarants,
• applicants who wish to become CBAM Authorised Declarants, and
• operators and installations in third countries.

The register will start operating:

• in January 2025 for authorized entities submitting quarterly CBAM reports, and
• in January 2026 with respect to reporting obligations in the target CBAM model.

Authorized CBAM declarant – what does the authorization process involve?

Companies importing goods covered by CBAM must undergo a rigorous authorization procedure. To obtain the status of a CBAM declarant, a number of formal requirements will have to be met. The authorization process will include:

• financial and operational capacity assessment: the applicant must demonstrate the ability to meet the CBAM commitments. The CBAM bodies will verify in particular the following four criteria:
  • the importer cannot be subject to bankruptcy proceedings;
  • the importer must not be in arrears with any customs duties, taxes or other fees related to the import of goods and business activities;
  • the importer must demonstrate sufficient financial capacity to meet its obligations and commitments;

• internal controls: implementation by importers of systems to ensure compliance;
• checking whether the entity has not committed any serious violations of the regulations in the past:

• Customs law;
• Tax law;
• Market abuse laws;
• CBAM Regulations.

The importer should also have an appropriate organizational structure to conduct internal controls. The importer should implement appropriate procedures to manage compliance with CBAM and the obligations arising from the CBAM certificate.

CBAM – what does it mean for entrepreneurs? What are the obligations?

The above-mentioned CBAM regulations are to be adopted before the end of 2024. This means that the entry into force of the new regulations is fast approaching and will have a direct impact on companies importing products covered by the CBAM system into the European Union.

There will be many new CBAM-related obligations in 2025. Most of the regulations that the European Commission will adopt concern the target CBAM model, which will start on January 1, 2026. Companies should prepare for the upcoming changes:

• Obligation to obtain authorisation: the importer will have to apply for the status of authorised CBAM declarant;
• Maintaining accurate records: the importer will have to collect data on imports, emissions related to the production of imported goods. The obligation to maintain CBAM records results directly from the provisions of the CBAM regulation, but has been postponed until January 1, 2026. Importers should, however, maintain CBAM records now in order to properly prepare data for reporting.
• Payment for emissions: for each tonne of CO2 emitted related to the production of imported goods, the importer will have to buy an appropriate number of CBAM certificates.

To prepare for the above responsibilities, it is worth taking the following steps now:

• Identify products, i.e. check whether the products are covered by the CBAM system;
• Prepare to submit an application for authorization – to do this, one must collect the necessary documents and required information;
• Implement appropriate systems, i.e. provide the company with the systems needed to manage CBAM data;
• To follow changes means to be up to date with the latest information regarding CBAM.

It is worth emphasizing that the sooner an importer starts preparing for the new regulations, the easier it will be to adapt to the new requirements. Delays can lead to problems and additional costs.

Do not hesitate, consult our advisor who will help you understand the new regulations and adapt your business to the new CBAM requirements.

Check out our service: CBAM Reporting

We also offer support in registering as an authorized declarant – ask for an offer