CBAM FAQs
Who does CBAM cover?
CBAM will be implemented on imports of iron, steel, aluminium, cement, electricity, fertilizers, and hydrogen originating from outside the European Union (EU) starting reporting October 1st, 2023. Selected sectors for CBAM have high risk of carbon leakage and emission intensity, accounting for over 50% of covered ETS sector emissions. In the future, it may expand to include other ETS sectors.
From 2026, EU importers of covered goods must register with national authorities and buy CBAM certificates priced based on EU ETS allowances. Importers declare and offset emissions annually, with allowances for previously paid carbon prices during production.
What is the European Emissions Trading System (EU ETS)?
The European Emissions Trading System (EU ETS) is the world’s first and largest carbon emissions trading system. It is a cornerstone of the European Union’s policy to combat climate change and reduce greenhouse gas emissions.
How can my business comply to CBAM regulations Ireland?
Importers must secure authorization as an “authorized declarant,” annually disclose quantities and embedded emissions of goods and submit CBAM certificates to offset the disclosed emissions.
What are Carbon Credits?
Carbon credits represent quantifiable and verifiable reductions in emissions achieved through certified climate action initiatives. Such initiatives aim to diminish, prevent, or eliminate greenhouse gas (GHG) emissions.
How do Carbon Credits work?
Businesses that contribute to pollution are granted credits permitting them to maintain emissions within a specified threshold, which is gradually lowered over time. Simultaneously, if a company possesses surplus credits, they could sell them to other businesses in need. Consequently, private enterprises are doubly motivated to curtail greenhouse gas emissions: firstly, by incurring expenses to acquire additional credits if their emissions surpass the limit, and secondly, by potentially generating revenue through emission reduction efforts and the sale of excess allowances.
Importers Obligations
Importers of CBAM goods are required to enrol in the CBAM transitional registry and be ready to submit quarterly reports detailing imports starting from January 2024.
What is the Phase-In Period?
The CBAM initiates a transitional phase starting from 1 October 2023, and extending until 31 December 2025. This interim period aims to gather essential data to refine the structure of the CBAM for its permanent implementation starting January 1, 2026. Throughout this transition, importers are solely obligated to fulfill reporting requirements, without any financial adjustments being enforced.
