- The European Commission has opened a four-week consultation following the publication of a draft implementing regulation for CBAM on 13 May 2026.
- The draft rules explain how the payment of third-country carbon prices can reduce CBAM
European Commission Adopts Reporting Rules for Transitional Phase of Carbon Border Adjustment Mechanism
Importers into the EU of CBAM goods should be aware of their transitional reporting obligations under the new rules.
By Paul A. Davies, Michael D. Green, and James Bee
On 17 August 2023, the European Commission (Commission) adopted rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase, which begins on 1 October 2023 and runs until 31 December 2025. The Implementing Regulation (IR) outlines the transitional reporting obligations of importers into the EU of CBAM goods and the methodology for calculating emissions from the production of such goods.
European Parliament and European Council Reach Provisional Agreement on Carbon Border Adjustment Mechanism
By Paul A. Davies, Michael D. Green, and James Bee
The CBAM would seek to mitigate carbon leakage through the imposition of a levy on carbon-intensive imports into the EU, while free allowances under EU ETS would be phased out.
On 13 December 2022, negotiators from the European Parliament and European Council reached a provisional and conditional agreement on the terms of the EU’s carbon border adjustment mechanism (CBAM).
The CBAM was initially proposed by the European Commission in July 2021 as part of its “Fit for 55” package of policies. The measure seeks to address and mitigate the risk of “carbon leakage” from the EU, which refers to the risk that the EU’s greenhouse gas reduction efforts will be offset by increasing emissions outside of its border through the relocation of production to non-EU countries with less ambitious emissions reduction policies.
The CBAM would impose a levy on in-scope goods that are imported into the EU. Importers of such goods would be required to pay an amount equal to the cost of the emissions allowances under the EU Emissions Trading System (ETS) that would have been necessary to pay to produce that good in the EU.
European Commission Launches Consultation on Carbon Border Adjustment Mechanism
The carbon border adjustment mechanism would aim to prevent carbon leakage resulting from carbon pricing in the EU emissions trading system.
By Paul A. Davies and Michael D. Green
On 22 July 2020, the European Commission (the Commission) published a consultation on a carbon border adjustment mechanism (CBAM) that is open until 28 October 2020. According to the Commission, the CBAM would aim to ensure equivalent carbon costs between imports and goods produced in the EU. Notably, the Commission’s COVID-19 recovery fund includes the CBAM as a repayment option. (For more on the recovery fund, see this post.)