On October 1, 2023 European Customs Union
The EU wants to reduce emission with 55% by the year 2030. In order to get “Fit for 55”, CBAM will compensate for specific commodities which are classed as possible high CO2 emitters. As the importing party, you purchase a carbon certificate to compensate for the import. This certificate compensates specifically for the carbon price that would have been paid, had the cargo been produced under EU carbon rules. The current Emission Trading system factors in some of this, but under this old system there’s a question of “carbon leakage”, which the CBAM system fixes. Emission rules in the EU are becoming stricter, whereas in non-EU countries the rules remain the same, so the gap is increasing. CBAM is set to close that gap.
Currently the list consist of specific products and HS codes, as follows;
• Cement
• Iron and steel
• Aluminium
• Fertilizer
• Electricity
• Hydrogen
• Certain (undetermined) precursors
• Downstream products, such as:
HS code 7318, articles of iron or steel
HS code 7326, other articles of iron or steel
HS code 7616, articles of aluminium
As we approach the year 2030, the list will be expanded.
initiated CBAM.