Carbon Tax | EU CBAM Reporting Deadline Extended
Carbon Tax | EU CBAM Reporting Deadline Extended
The Carbon Border Adjustment Mechanism or CBAM is a key component of the European Commission's Fit for 55 plan, aimed at reducing emissions of greenhouse gases.
As the European Union introduces regulation aimed at fighting climate change, the fear is that companies will move their operations to jurisdictions with lower environmental standards to minimise costs. This is known as carbon leakage.
To avoid this scenario and to prevent EU environmental regulation from being undermined, the EU has introduced CBAM to equalise the cost of cheap but carbon intensive imports relative to cleaner but more expensive materials produced in the EU.
CBAM is being introduced in 2 stages. The transitionary phase began in October 2023 and will end on the 31st of December 2025. During this time, EU importers of certain steel and iron products, aluminium, cement, fertilisers, electricity and hydrogen will be legally required to report levels of embedded carbon dioxide emissions to their national competent authority on a quarterly basis. However, importers are not required to pay any CBAM charges during the transitionary phase.
The first reporting period ended on the 31st of January 2024, but due to technical issues that deadline was extended to 29th of February 2024.
Importers who fail to report before the deadline will be subject to penalties.
There is now very little time for businesses to comply with the CBAM reporting requirements for the first reporting period.
If you require assistance meeting CBAM compliance requirements before the deadline expires or if you need help understanding how this will impact your business, please contact David Savage (dsavage@bdo.ie) or Carol Lynch (clynch@bdo.ie) at BDO
As the European Union introduces regulation aimed at fighting climate change, the fear is that companies will move their operations to jurisdictions with lower environmental standards to minimise costs. This is known as carbon leakage.
To avoid this scenario and to prevent EU environmental regulation from being undermined, the EU has introduced CBAM to equalise the cost of cheap but carbon intensive imports relative to cleaner but more expensive materials produced in the EU.
CBAM is being introduced in 2 stages. The transitionary phase began in October 2023 and will end on the 31st of December 2025. During this time, EU importers of certain steel and iron products, aluminium, cement, fertilisers, electricity and hydrogen will be legally required to report levels of embedded carbon dioxide emissions to their national competent authority on a quarterly basis. However, importers are not required to pay any CBAM charges during the transitionary phase.
The first reporting period ended on the 31st of January 2024, but due to technical issues that deadline was extended to 29th of February 2024.
Importers who fail to report before the deadline will be subject to penalties.
There is now very little time for businesses to comply with the CBAM reporting requirements for the first reporting period.
If you require assistance meeting CBAM compliance requirements before the deadline expires or if you need help understanding how this will impact your business, please contact David Savage (dsavage@bdo.ie) or Carol Lynch (clynch@bdo.ie) at BDO