The European Union aims to be climate neutral by 2050. The European Carbon Border Adjustment Mechanism (CBAM) is intended to prevent carbon leakage – the relocation of CO2-intensive business activities outside of Europe – by ensuring that producers outside of the EU have to bear the same cost for their CO2-emissions as their European competitors. Moreover, the mechanism is intended to encourage more climate-friendly production outside the EU.
CBAM impacts businesses as questions remain
Businesses importing products covered by the CBAM into the EU are faced with significant reporting requirements due to its implementation and should prepare for rising costs because of it. The EU’s simplification package has somewhat reduced this burden. Changes to the de-minimis-rule are a positive sign for companies but open questions remain. Namely, how loopholes for circumventing CBAM will be closed and how disadvantages for EU-exports due to carbon pricing will be reduced.
Guidelines published by vbw offer orientation
vbw has published an overview of CBAM and summarized the obligations arising from it for businesses. At present it is available in German.
