CBAM Unveiled: BAXTER FREIGHT (UK) explains new Regulations Impacting EU Imports

Navigating the complexities of international trade can be challenging, especially with new regulations like the Carbon Border Adjustment Mechanism (CBAM) coming into effect. BAXTER FREIGHT, your Connecta partner in the United Kingdom, is here to help businesses understand the implications of CBAM and ensure that their goods move smoothly into Europe.

CBAM: The Impact of Moving Goods into Europe

Businesses importing goods into Europe must become familiar with CBAM. The Carbon Border Adjustment Mechanism (CBAM) is now in effect as part of the EU Green Deal, aiming to reduce global greenhouse gas emissions (GHGs) by 55% by 2030. CBAM assigns a fair price to the carbon emitted during the production of carbon-intensive goods entering the EU, encouraging cleaner production practices in non-EU countries.

Transition Phase: October 2023 – December 2025

During this period, any business importing carbon-intensive goods into the EU (excluding Switzerland, Liechtenstein, Norway, and Iceland) must produce a declaration and pay a duty under CBAM regulations. When CBAM is fully operational, businesses will need to purchase and surrender CBAM certificates for the preceding year’s emissions and submit an annual CBAM declaration.

Global Reach

The UK will implement CBAM in January 2027, and other countries like Australia, Canada, Japan, and South Korea are developing their own CBAM frameworks.

CBAM Reportable Commodities

Importers of certain products into the EU must submit quarterly reports to the CBAM Transitional Registry. The first CBAM report for Q4 2023 was due in January 2024. If an importer is represented by a Registered Customs Representative (RCR), the RCR assumes responsibility for CBAM obligations.

Required Data for Reporting

Importers and producers must provide detailed information, including:

• Data identifying the CBAM declarant (name and account number).
• Data on imported goods (quantities in tonnes, type, country of origin, and production facility).
• Emissions from the production of these goods.
• CO2 costs already covered in the country of origin.

If goods originate in the EU, businesses will not be required to report CBAM. If unsure whether goods are affected by CBAM, a handy HS code checker can help.

Definitive Phase: January 2026

From January 2026, all listed goods can only be imported by an “authorised CBAM declarant,” who must apply for authorisation via a centralised CBAM registry and purchase CBAM certificates.

Cost Implications

Costs during the transitional phase include:

1. Establishing a reporting mechanism for CBAM.
2. Fees for customs brokers or agents (RCR) gathering information and preparing reports.
3. Quarterly reports detailing imported quantities, embedded emissions, and any carbon price paid in the country of production.

From January 2026, declarants must purchase CBAM certificates covering at least 80% of their goods’ embedded emissions, with certificates currently priced around 80 Euros per tonne of GHGs emitted.

Key Actions

1. Review current imports to identify CBAM impacts.
2. Assess reporting obligations for suppliers with EU-bound products.
3. Examine customs classification and country of origin for imports, especially in iron, steel, and aluminum sectors.
4. Understand the potential future costs of CBAM on products.
5. Ensure uninterrupted import of CBAM products.
6. Consider wider decarbonisation strategies to minimize costs.

Need Assistance? Baxter Freight’s in-house customs team and Sustainable Freight Network are closely monitoring CBAM developments. For further guidance on CBAM or other customs issues, pls. visit BAXTER FREIGHT for more information. They are there to help