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On 17 August, the European Commission adopted the rules governing the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its transitional phase, set to commence on 1 October of this year and runs until the end of 2025. 

The newly adopted Implementing Regulation outlines the transitional reporting requirements for EU importers of CBAM goods and introduces the transitional methodology for calculating embedded emissions released during the production process of such goods. Throughout the CBAM's transitional phase, traders will be obligated to report on the emissions embedded in their imports subject to the mechanism. 

The Commission has also issued guidance documents on the practical implementation of the new rules. At the same time, dedicated IT tools, training materials, webinars, and tutorials are under development to assist importers in performing and reporting their calculations. While importers are expected to gather fourth quarter data from 1 October 2023, the initial report submission deadline has been set for 31 January 2024.

Before its adoption, the Implementing Regulation was subject to a public consultation to which CLECAT provided its feedback. Whereas the Commission’s press release notes that the transition period will give adequate time for businesses to prepare in a predictable manner, while also allowing for the definitive methodology to be fine-tuned by 2026, CLECAT and other associations are concerned about the time frame. It will be a huge challenge to freight forwarders and many economic operators to comply with rules for items beyond their control and without any proper time to develop digital solutions.

The foreseen timeline of 6 weeks to learn the details on the applicability of the new rules before the beginning of the reporting obligations foreseen during the transition period creates an enormous burden on the economic operators CLECAT represents, to prepare in a successful and compliant manner.