What is CBAM ?

The CBAM is a new mechanism being implemented by the European Union to reduce carbon dioxide (CO2) emissions and create a level playing field for companies importing goods into the EU. This mechanism aims to ensure that importers from outside the EU have a similar obligation to report CO2 emissions as domestic producers and to prevent companies outside the EU from moving production to countries with less stringent climate regulations. However, it is important to note that Neele-Vat focuses only on Importers based outside the EU and does not do CBAM reporting for EU importers.

For you as a non-EU importer, this means that if you export goods to the EU that are covered by the CBAM, you will face new obligations regarding reporting the CO2 emissions associated with the production of these goods. As part of the CBAM, importers must report how much CO2 was emitted outside the EU in the production of the imported goods.

HS codes involved CBAM

The CBAM regulation includes specific HS codes that are subject to this regulation. These codes must be closely monitored to meet the requirements. Click here for the list of HS codes affected.

This involves the following goods:

• Aluminum
• Cement
• Electricity
• Iron(ore)

Exceptions

There is no threshold for the reporting requirement, but the Carbon Border Adjustment Mechanism (Regulation (EU) 2023/956) does list some exceptions. In the following cases, the regulation does not apply:

1. Article 2(3)(a): the regulation does not apply to goods where the value per shipment (and not per HS code) does not exceed 150 euros;
2. Article 2(3)(b): the regulation does not apply to goods that are part of travelers' personal luggage;
3. Annex III: the Regulation does not apply to goods originating in the third countries and territories listed in point 1 of the Annex; these are Norway, Iceland, Switzerland and Liechtenstein;
4. On goods transported or used in military activities in accordance with Article 1 point 49 of Delegated Regulation (EU) 2015/2446.

Indirect Representation An important aspect of CBAM is the role of the Indirect Representative. We, at Neele-Vat, can act as your Indirect Representative. This means that we act on your behalf when filing CBAM returns.

Failure to find an indirect representative willing to act as a CBAM declarant will affect your ability to export goods to the EU. Without such a representative, you can no longer import CBAM goods to the EU.

Due diligence investigation For Non-EU importers, we evaluate in advance whether the customer can be accepted for CBAM reporting. It is therefore essential that we assess your situation in advance through a complete due diligence investigation. After this, we will assess whether we will act as Indirect Representative.

Reporting requirement in Indirect Representation

A monthly CBAM statement is generated, request affected importers to provide data for reporting. Missing information may result in fines and blocking of further returns. This data is compiled into a quarterly report that is submitted by the deadline.

Methodology

The importer sends all necessary data and documents by e-mail to our operations department, after which they are checked by our declarant. Based on established criteria, it is assessed whether all the necessary data for a CBAM declaration is present. In case of doubt, consultations are held with management. A regular spot check is performed to ensure accuracy. It is important to note that importers themselves remain responsible for providing the correct information. Neele-Vat only acts as a reporting point for customs in this regard through the use of a code in the declaration.

Default values It is important to note that for now importers can still use default values (default values) for reporting CO2 emissions under the CBAM, both for direct and indirect emissions. These default values are currently accepted as a temporary measure to facilitate the process. However, it is essential to understand that this practice will change in the future. The European Union is expected to adopt on.

eventually move to establishing specific, more detailed requirements for reporting CO2 emissions, for both direct and indirect emissions, which will require importers to provide more detailed and accurate data. As a result, importers will need to adjust their reporting practices to comply with the new CBAM requirements. It is advisable to monitor these developments closely and make timely preparations for the transition to more detailed reporting requirements.

Control and Management Measures

To ensure the accuracy of import declarations, they are included in our 5% AEO audit. This check includes checking contracts, the use of approved importers, the presence of an Indemnity statement, and the completeness of the order.

At Neele-Vat, we are committed to transparent and compliant procedures to ensure smooth importation of CBAM goods. We are committed to providing quality services and complying with all legal requirements.

In short, the EU Carbon Border Adjustment Mechanism brings with it new obligations for non-EU importers with respect to reporting CO2 emissions. It is important to stay abreast of developments and take steps to comply with the requirements of the CBAM if necessary.

We hope this information is helpful to you and are at your disposal for any further questions.

Useful documents For importers GUIDELINES FOR THE IMPORTER OF GOODS IN THE EU ( English)

For installations GUIDELINES FOR THE IMPLEMENTATION OF CBAM FOR EXPLOITERS OF INSTALLATIONS OUTSIDE THE EU.