Carbon Border Adjustment Mechanism (CBAM)

Carbon Border Adjustment Mechanism (CBAM)

The Carbon Border Adjustment Mechanism (CBAM) emerged as a significant policy initiative from the European Union to address carbon leakage and ensure a level playing field for energy-intensive industries regulated by the EU Emission Trading System (ETS). This measure protects the EU’s climate ambitions by imposing reporting requirements on imported goods with high greenhouse gas (GHG) emissions. It aims to encourage global adoption of greener production methods while maintaining economic fairness.

Since October 1, 2023, importers of specified products into the European Union must report the volume of their imports and the embodied GHG emissions in these products. This regulation reflects a growing global trend, as other countries are now developing their own CBAM frameworks in response to the EU's initiative.

Who Does CBAM Impact?

Currently, the EU CBAM applies to imports in the following sectors:

  • Aluminum

  • Cement

  • Electricity

  • Fertilizers

  • Hydrogen

  • Iron and Steel

For each of these sectors, importers must provide a comprehensive carbon emissions declaration, including:

  • Direct emissions (Scope 1): Emissions directly generated by the production process.

  • Indirect emissions (Scope 2): Emissions resulting from electricity and steam consumption during production.

  • Precursor emissions (complex sectors): In industries like cement, fertilizers, and iron and steel, emissions from upstream inputs must also be accounted for.

Why Is CBAM Important?

CBAM represents a crucial step in promoting global climate accountability. It incentivizes exporters to adopt cleaner technologies and provides a competitive edge for low-carbon products in global markets. However, for businesses exporting to the EU, compliance can be complex and time-sensitive. Failing to report accurate GHG data could result in significant penalties or restricted market access.

How Can OmnexFuturepast Help?

Navigating the intricate CBAM requirements can be challenging, especially for companies new to carbon reporting. OmnexFuturepast offers expert guidance to help importers understand and meet these obligations effectively. From calculating emissions to preparing accurate declarations, we ensure your business remains compliant and competitive in the evolving regulatory landscape.

Our services include:

  • GHG emissions assessment for imported goods

  • Scope 1 and Scope 2 emissions reporting

  • Support for precursor emissions calculations in complex sectors

  • Comprehensive CBAM compliance strategies

Stay Ahead of Carbon Border Regulations

With CBAM regulations expanding and other countries introducing similar mechanisms, now is the time to act. Ensure your business is fully prepared to comply with current and future requirements.

Start Counting – Ensure Compliance Today!