Carbon Border Adjustment Mechanism (CBAM): What Are We Talking About?

At Emons Cargo 2WIN, we are committed to reducing our environmental impact and helping our customers to do the same. That’s why we are paying close attention to the development of the Carbon Border Adjustment Mechanism tax. We are happy to provide some information about it.

The European Union’s Carbon Border Adjustment Mechanism (CBAM) is a new policy that will put a price on carbon emissions from imported goods. The CBAM tax aims to reduce the carbon emissions of imported goods and to level the playing field between EU and non-EU producers.

In short, the aim is to balance the competitiveness of the market between EU businesses subjected to the EU’s carbon pricing system and prevent carbon leakage. Carbon leakage is the risk of businesses moving their production to countries with less stringent climate policies.

The CBAM will apply to various goods, including iron and steel, cement, aluminium, electricity, and fertilizers. It will come into force in 2026 and will be implemented in two phases: transition and definitive periods.

During the transition period, importers will report the carbon footprint of their imports without the tax being due. This information will be used to develop the methodology for calculating the carbon tax on imports during the definitive period.

The report should be submitted to the CBAM authorities on a quarterly basis. This report must include the overall quantity of imported goods for that quarter, along with the associated emissions that are directly (scope 1) and indirectly (scope 2) linked to these goods’ production, as well as the corresponding carbon pricing owed in the country of origin.

Importers will also indicate to their customs authorities whether they have taken note of the reporting obligation regarding CBAM goods. Importers can do this by providing their customs authorities – also via their haulier – with one of the following codes:

Transporting CBAM goods without communicating the correct code may result in the impossibility of importing the goods into the European Union.

Once the regulation has fully come into force, importers will pay a carbon tax on their imports. The amount of the tax will be based on the embedded carbon emission of the imported goods. Importers will have to provide a CBAM declaration for the previous calendar year containing:

CBAM certificates are permits that importers can use to surrender to their customs authorities in order to import CBAM goods into the EU. In other words, these certificates are a way for importers to prove that they have paid for the carbon emissions associated with their imports.

For more information, read here.

The European Commission will review the CBAM regulation before the end of the three-year transition period. This review will assess the possibility of expanding the scope of the CBAM. It will include indirect emissions, other goods at risk of carbon leakage, and embedded emissions from transportation (scope 3).

As a haulier, we cannot really make a difference in the amount of CO2 emissions embedded in the production of goods. What we can do is to do our best to improve companies’ overall carbon footprint. We do it by working on the transportation (scope 3) share.

With our double deck 2WIN trailers, we can load 54 euro pallets. This is 64% more volume than standard trailers and it also means 40% less CO2 emissions per trip. In addition, we can count on other CO2 emissions savings due to the use of LNG fuel on part of our fleet, the improved aerodynamics of our newest trucks and the solar panels on most of our trailers.

All considered, it is easy to see how Emons Cargo 2WIN can be a game-changer in terms of improving both a carbon footprint and a bottom line.

Do not wait for future taxes, check our 2WIN solution and start saving on CO2 emissions and costs immediately.