CBAM: the EU's carbon levy
The EU has set itself a number of goals, as part of the European
Green Deal, including a 2030 target of a 55% reduction in carbon
emissions compared to 1990 levels. One feature of the European
Green Deal is the introduction of the EU's Carbon Border
Adjustment Mechanism ("CBAM"). The CBAM
seeks to prevent 'carbon leakage' and to encourage cleaner
industrial production systems in non-EU countries, by introducing a
levy on products imported into the EU which are carbon-intensive.
Currently, the levy applies to iron, steel, aluminium, cement,
electricity, fertilisers and hydrogen, that are produced outside
the EU.
At the moment, we are in the transitional period for CBAM and
there are currently no financial obligations for importers.
Instead, importers have CBAM reporting obligations during this
transitional period and must make quarterly reports in respect of
the CBAM products which they import via the EU transitional CBAM
registry.
