Supersheen Services
Carbon Border Adjustment Mechanism (CBAM)
Compliance Support
Carbon Border Adjustment Mechanism
The Carbon Border Adjustment Mechanism (CBAM) is a climate policy tool from the EU, designed to prevent “carbon leakage” (when production shifts to countries with lower environmental standards). It applies to certain imported goods like iron, steel, aluminium, cement, fertilisers, electricity, and hydrogen. This mechanism effectively puts a price on the carbon emissions embedded in these goods, ensuring that European companies are not disadvantaged by stricter EU climate policies compared to those in countries with less ambitious environmental regulations. By requiring importers to purchase carbon certificates mirroring the EU’s carbon price, CBAM aims to level the playing field. Ultimately, it encourages cleaner industrial production globally by extending the EU’s carbon pricing to imports, thereby promoting more sustainable practices in international trade.
We supply emissions data, to allow you to:
- Declare the carbon content to EU authorities
- Purchase CBAM certificates accordingly
How We Help You At Supersheen
As part of our commitment to sustainability and regulatory transparency, we support clients who are subject to the EU’s CBAM regulation by providing the necessary emissions data related to our metal finishing processes. This ensures seamless compliance for clients importing into the European Union.
CBAM Requirements
What you must do:
For CBAM purposes, you’ll need to report the direct and specific indirect emissions associated with the production of the imported goods. This typically means accounting for the greenhouse gas emissions released during the manufacturing processes. Collecting this data usually involves close collaboration with your non-EU suppliers. They’ll need to provide accurate information on their production processes and associated emissions. This can be one of the more challenging aspects, as it requires a deep understanding of the entire supply chain and the specific methodologies for calculating embedded carbon. Importers often find themselves needing to guide their suppliers through the data collection process to ensure it meets EU standards. This data will then need to be verified by an independent, accredited verifier to ensure its accuracy and compliance with CBAM requirements. The verification process is critical to the integrity of the system and ensures that the reported emissions are reliable and transparent.
Who needs to buy CBAM certificates and when?
If your business imports certain goods, like iron, steel, aluminum, cement, fertilizers, electricity, or hydrogen, into the European Union, you’ll likely need to purchase CBAM certificates. These are required by EU importers, also known as “authorized declarants.” The system involves quarterly reporting of embedded emissions, and then the surrender of certificates annually. The transitional period, which involves reporting without financial obligations, began in October 2023. Financial obligations for purchasing certificates are expected to start in 2026. Keep an eye on official EU announcements for precise deadlines and detailed timelines.
How are CBAM certificates priced, and what influences their cost?
The price of CBAM certificates will be linked to the average weekly closing price of EU Emissions Trading System (ETS) allowances. This means the cost will fluctuate, similar to a market price. Several factors can influence your overall cost. For instance, if a carbon price has already been effectively paid in the country where your goods originated, you may be able to claim a reduction in the number of CBAM certificates you need to purchase. The goal is to avoid double pricing carbon.
What are the penalties for non-compliance or misreporting of CBAM certificate obligations?
Non-compliance with CBAM obligations can lead to significant financial penalties. These can include fines for failing to submit accurate declarations, not surrendering the required number of CBAM certificates by the deadline, or providing false information. The specific penalties will be determined by national authorities in the EU member states, but they are designed to be effective, proportionate, and dissuasive. It’s crucial to ensure timely and accurate reporting to avoid these repercussions.
We Guarantee Quality Data, On Time.
CBAM is a regulatory obligation for EU importers. You’re indirectly involved by providing emissions data to your clients, helping them meet their obligations. So, you support CBAM compliance, but you don’t “issue” CBAM certificates—only EU importers submit declarations and buy CBAM certificates.
Simplifying Compliance for Metal Product Exporters to the EU
Navigating CBAM: Your Partner in Emissions Data for EU Imports
As part of our commitment to environmental responsibility and regulatory transparency, we provide our clients with the necessary emissions data to support compliance with the European Union’s Carbon Border Adjustment Mechanism (CBAM).
If your business exports finished metal products to the EU, CBAM may require you to report the embedded carbon emissions of imported goods such as steel or aluminium. We assist by supplying accurate emissions-related information associated with our metal finishing processes, helping you meet your CBAM reporting obligations.
Note: While we do not issue CBAM certificates directly, we support your compliance by ensuring that all relevant process data is available and documented upon request.
