Carbon Border Offset Mechanism (CBAM) is a European Union regulation aimed at addressing the relocation of production of certain goods to countries outside the EU where carbon costs are lower. Its main objective is to ensure to prices of imported goods more accurately reflected their true carbon content.

This mechanism represents a fundamental change for international trade and the environmental responsibility of companies. If your company imports specific raw materials or energy from countries outside the EU, it is essential to understand the new obligations, which will come into full force soon.

Which sectors are under scrutiny?

The CBAM Regulation does not apply to all goods, but focuses on energy-intensive sectors that are most exposed to the risk of carbon leakage. According to Annex I to Regulation (EU) 2023/956, these include the following sectors:

• Iron and steel.
• Aluminum.
• Cement.
• Fertilizers.
• Electricity (applies without volume limit).
• Hydrogen (applies without threshold).

Key dates and transition periods

CBAM implementation takes place in several stages to allow businesses time to adapt:

1. Transitional phase (1 October 2023 – 31 December 2025): During this period, only reduced obligations apply, mainly relating to emissions reporting.
2. Full set of obligations (from 1 January 2026): From this date, all obligations arising from the Regulation enter into force.
3. Registration deadline (March 31, 2026): This is the last possible registration deadline for importers who are already importing CBAM goods.
4. Financial settlement (year 2027): This year, eligible declarants will be required to purchase and surrender CBAM certificates for the first time for emissions associated with goods imported in 2026.

Who is required to register?

CBAM obligations apply to importers whose annual import volume of CBAM goods exceeds 50 tons. However, it is important to note that for categories electricity and hydrogen there is no minimum limit – in these cases, you must become an authorized declarant before the import itself.

If your company is based outside the EU, you must appoint a person to carry out these tasks. indirect customs representative. For entities established in the EU, there is an obligation to apply for the status of authorised declarant before the earlier of two dates: either before the import threshold (50 tonnes) is exceeded, or at the latest by March 31, 2026.

How does the registration process work?

The process of obtaining the status of "CBAM Authorized Declarant" is digitalized and requires several steps:

• Submitting an application: Applications are submitted online. authorization management module (AMM).
• Tools: The European Commission has published instructional videos to help importers navigate the system.
• Ongoing reports: In addition to the permit, you must register as a declarant filing reports. These reports are filed quarterly through the transitional register.
• Local authorities: For example, in Ireland, the competent authority is the Environmental Protection Agency (EPA), which provides the checklists required for the application.

Consequences of failure to comply with obligations

Ignoring the CBAM Regulation can have serious consequences for businesses. If an importer exceeds the threshold and does not apply for Authorised Declarant status, they risk high fines. In addition to financial sanctions, business continuity itself may be at risk, as imports of CBAM goods will only be permitted by authorized entities after the transition period.

Correctly filed declarations are crucial as they serve as a basis for calculating the number of certificates that will need to be purchased in the future. It is recommended to start preparing as soon as possible to avoid complications during customs procedures after January 1, 2026. JRi&CO2AI