EU putting in place Carbon Border Adjustment Mechanism (CBAM)


On May 10th, the European Commission has released the latest updates on Carbon Boarder Adjustment Mechanism (CBAM), as well as a memo that answers some key questions been asked by the public.


What is CBAM?


CBAM is a mechanism based on a system of certificates to cover the embedded emissions in products being subsequently imported into EU. This mechanism departs from the EU’s Emission Trading System (ETS) in some limited areas. It is not a ‘cap and trade’ system, instead, the CBAM certificates mirrors the ETS price.


CBAM focus on goods that most at risk of carbon leakage, such as cement, iron & steel, aluminum, fertilizer, hydrogen and electricity.


Why CBAM is necessary?


Although EU is already released the world’s first international emissions trading scheme, EU’s Emission Trading System (ETS), which is effective in addressing the risk of carbon leakage, but it also dampens the incentive to invest in green production. Under these circumstances, CBAM aims to prevent ‘carbon leakage’ and to complement the ETS.


How will the CBAM works in practice?

CBAM将依照ETS的价格体系,其证书的价格将根据ETS系统的交易配额的每周平均拍卖价格来计算,单位为欧元/吨 二氧化碳排放量。进口商必须登记、购买,或通过代理方登记、购买CBAM证书。

The CBAM will mirror the ETS. The price of certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in € / tonsof CO2 emitted. Importers of the goods will have to, either individually or through a representative, register to take part in the CBAM and buy CBAM certificates.


What is the current status of CBAM


Now that the co-legislators have signed the CBAM Regulation, the new rules will officially enter into force the day after publication in the Official Journal of the EU. The CBAM itself will enter into application in its transitional phase on 1 October 2023, with the first reporting period for traders ending 31 January 2024. The set of rules and requirements for the reporting of emissions under CBAM will be further specified in an implementing act to be adopted by the Commission after consulting the CBAM Committee, made up of experts from EU Member States.




Under the Commission’s proposal, importers will have to report emissions embedded in their goods subject to CBAM without paying a financial adjustment in a transitional phase starting on 1 October 2023 and finishing at the end of 2025, giving the time for the final system to be put in place.


Once the definitive system becomes fully operational in 2026, EU importers will have to declare annually quantity of goods and the number of embedded emissions in the total goods they imported into EU in the preceding year, and surrender the corresponding amount of CBAM certificates.


How CBAM will affect current cooperation between European Union and China

Based on the regulations mentioned above, goods in certain sectors (cement, iron & steel, aluminum, fertilizer, hydrogen and electricity) export from China to EU will be covered by the CBAM. 



How can China enterprise get ready for the CBAM?

对于中国企业来说, 尽管CBAM将带来诸多挑战,但同时也潜藏着基于。尽快对企业自身的生产行为进行转型升级,从而达到低碳、绿色的生产流程,将能够使中国企业在CBAM全面上线之际,占得市场先机。仲欧脱碳科技(CNEUCN)的专家及合作伙伴对CBAM及其相关的影响有着丰富的知识储备,可以为企业提供详尽的咨询和技术支持。此外,仲欧脱碳科技还可以对企业的“去碳化”事宜提供咨询服务,帮助企业实现从上直下的“绿色升级”。

It is important for Chinese enterprises to realize that even though the CBAM can be a challenge, but it also bringsopportunities if the enterprise can timely upgrade its operation green and sustainable. China Euro Carbon Neutral (CNEUCN), its experts and partners have deep experience and knowledge about CBAM and related impacts, so they can provide specific advisory and supporting technologies. 

Nevertheless, they can offer advisory services on “decarbonization” matter, helping enterprises to go green from top to bottom. 


Beyond the tailor-made consulting services, CNEUCN also provides:

● 提供能力建设和相关知识分享会议、培训课程。在城乡地区组织有关碳中和转型和战略的会议、展览、培训研讨会。

Capacity building and knowledge sharing conferences, training sessions. Organizing conference, exhibition, training seminars about the transition and strategies related to carbon neutrality both in urban and rural areas.

● 双边促进欧洲和中国企业进入各自市场的准入,并支持其发展

Bilaterally promote the access and support the development of European and Chinese enterprisesinto respective markets.

● 与中国和欧洲的相关政府部门、行业组织和公司保持密切联系

Maintain close relations with the relevant Government Authorities, industry organizations and companies in China and Europe.