The Carbon Border Adjustment Mechanism (CBAM) is part of the EU's "Fit for 55" package and aims to reduce emissions in the European Union by at least 55% by 2030. This mechanism affects numerous industries and companies in the EU that import certain products from non-EU countries, including iron, steel, cement, aluminum, and hydrogen. Since October 1, 2023, the start of the transition phase, companies have been required to report for the first time.

‍

What Is CBAM?

‍

CBAM was introduced to mitigate the risk of so-called "carbon leakage." This occurs when companies relocate their production to countries with less stringent environmental regulations to avoid emission costs. CBAM is intended to ensure that the EU's emission reduction efforts are not undermined by such evasive actions.

Companies that import CBAM-relevant products must purchase CO2 certificates for this purpose. These certificates represent the emissions generated during the production of goods outside the EU.

‍
‍

Who Is Affected by CBAM?

‍

CBAM affects a wide range of industries, including the electrical, metal, and plastics industries, the packaging sector, and mechanical engineering. All companies that import CBAM-relevant products into the EU are required to report and must provide detailed quarterly information on emissions and product volumes.

‍

CBAM Obligations at a Glance

‍

Companies that import CBAM-liable goods must:

‍

• Calculate all direct and indirect emissions of their imported products.
  ‍
• Submit quarterly reports with the emissions and volumes of imported goods.
  ‍
• Purchase a special emission certificate for each affected product and annually surrender the correct number of CBAM certificates.

‍

Violations of reporting obligations can result in penalties ranging from $10 to $50 per unreported ton of CO2, depending on the severity of the infringement.

‍

CBAM Compliance with Tacto: 5 Steps to Easy Implementation

‍

Tacto offers a comprehensive solution to help companies comply with CBAM:

‍

1. CBAM Quick Scan: Identification of CBAM-relevant items and suppliers based on country of origin and assessment of the affected product portfolio.

‍

2. Automated Data Queries: Sending CBAM queries to supplier groups and automatic tracking and evaluation of responses.

‍

3. Item-Specific Detailed Queries: Detailed analyses at the item level for complete transparency.

‍

4. CBAM Report at the Push of a Button: Automatic generation of the CBAM report and ongoing documentation.

‍

5. Training and Consulting: Specialized training sessions and up-to-date information on CBAM and relevant legal developments.

‍
‍

Why Act Now?

‍

CBAM requirements affect not only the companies themselves but also their supply chains. To avoid heavy fines and supply chain disruptions, it is important for companies to secure their CBAM compliance early. A thorough analysis and a solid compliance program can also create a sustainable competitive advantage by increasing transparency and reducing emissions in the long term.

‍

For detailed guidance and more information on CBAM, download our whitepaper "Carbon Border Adjustment Mechanism (CBAM) in the Mid-Market: Mandatory Reporting Since October 2023" and learn how Tacto can help you comply with CBAM regulations.

The Carbon Border Adjustment Mechanism (CBAM) has been in effect since October 1 and affects all companies within the European Union (EU) that import iron, steel, cement, aluminum, electricity, fertilizers, hydrogen, certain upstream and downstream products (particularly iron and steel products) – in pure or processed form – from non-EU countries.