CBAM's Implications for Logistics: What You Need to Know
Climate change is a global emergency, and that's why the European Union has promoted the CBAM (Carbon Border Adjustment Mechanism), or CBAM for short. This is a key instrument that will regulate the carbon emissions of imported products into the European Union.
CBAM will enter into force in its transitional phase on October 1, 2023. Initially, it will apply to imports of certain goods whose carbon production is more likely to run a risk of leakage, such as: cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity. The measures will include changes to tariffs, restrictions, and bans on some products; this is intended to discourage the relocation of the production of goods with high carbon emissions to countries with less stringent environmental regulations.
During the transition phase, the implementing regulation of the mechanism and the reporting methodology provide for some flexibility in terms of the values used to calculate the embedded emissions in imports.
During the first year of implementation, companies will have the option to report in three ways:
Complete reports according to the new methodology (EU method).
Reporting based on equivalent national systems of third countries.
Reporting based on reference values.
From January 1, 2025, only the EU method will be accepted. However, importers will be required to collect data from the fourth quarter from October 1, 2023, and their first report will not be due until the end of January 2024.
Now, importers must comply with the following obligations:
Prior to the importation of goods, the importer must apply for the status of authorized declarant, to be done from December 31, 2024.
CBAM declaration: an annual declaration must be submitted, which must include the implicit emissions of the imported goods in the natural year.
Verification of implicit emissions.
Delivery of CBAM certifications: the declarant will deliver the number of certificates that correspond to the declared and verified implicit emissions through the CBAM register on an annual basis.
This initiative not only raises quality standards in production and trade at the global level, but also encourages the adoption of more sustainable practices around the world. Despite the challenges and adjustments that lie ahead, CBAM demonstrates a strong commitment to a more ecological and resilient future for all. Its success depends on global collaboration and a willingness to work together for the benefit of our planet and future generations.
Implications in logistics
The CBAM will have a significant impact on logistics, as it will require importers to collect data on the carbon emissions of imported products. This will lead to the adoption of new processes and technologies by logistics operators, in order to collect, process and submit this data in accordance with CBAM requirements.
At SPARX, we are committed to sustainability. Contact us and discover our options for green logistics:
T. +1 905-760-8001