European Union: The new European Carbon Border Adjustment Mechanism

By neub9
2 Min Read

CBAM Transitional Phase

First report in the Transitional Phase by importers due by 31 January 2024

In brief:

  • The European Carbon Border Adjustment Mechanism (CBAM) entered into force on 1 October 2023.
  • The full application of obligations will gradually start to apply through to 31 December 2025, known as the Transitional Phase.
  • EU importers are required to submit the first report under the CBAM by 31 January 2024, detailing the scope of embedded emissions in certain goods imported during the first quarter year of CBAM implementation (1 October 2023-31 December 2023).

This Client Alert informs EU importers about the necessary reporting requirements and provides an overview of the new regulation and its obligations.


  • Background
  • CBAM obligations and timeline
  • Scope of application
  • CBAM transitional reports
  • Summary and outlook


CBAM complements the EU Emissions Trading System (EU ETS) by ensuring that imported goods are subject to the same emissions prices as those produced within the EU, ultimately reducing global emissions and preventing carbon leakage.

CBAM obligations and timeline

The CBAM-Regulation sets out a timetable for phasing in the obligations of the mechanism during the Transitional Phase, with full implementation by 1 January 2026.

Scope of application

CBAM applies to goods such as aluminum, iron and steel, fertilizers, electricity, cement, and hydrogen imported from outside of the EU.

CBAM transitional reports

During the Transitional Phase, EU importers are required to report on the embedded emissions in the goods they import, with the first report due on 31 January 2024.

Summary and outlook

CBAM aims to balance out competitive disadvantages for domestic companies producing emission-intensive goods within the EU, and by 2026, the EU Commission will review the possibility of extending the scope of the mechanism to include additional goods.

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