Carbon duty – obligations from 2024

The EU Commission has started the gradual introduction of a carbon duty (CBAM), which will have a significant impact on businesses importing carbon-intensive goods into the EU. During the transitional period (as of 1 October 2023), importers of CBAM goods are subject to several reporting obligations. Under these new rules, the first CBAM report are due until the end of January 2024.

CBAM (Carbon Border Adjustment Mechanism)

The carbon duty will initially apply to imports of certain goods whose production is carbon intensive and at most significant risk of carbon leakage, like cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. Its scope will be gradually extended, with a full inclusion of all sectors subject to the EU Emissions Trading System (ETS) by 2030.

During the transitional phase of CBAM, which lasts from 1 October 2023 to 31 December 2025, importers of CBAM goods are subject only to a reporting obligation. In order to help importers fulfil their reporting obligations, the European Commission has developed the CBAM transitional registry. The registry became fully operational on 4 January 2024. Access to the transitional CBAM registry should be requested through the National Competent Authority (NCA) of the Member State in which the importer is established. In Slovakia, the competent authority for CBAM is the Ministry of Environment.

Importers of CBAM goods are required to register and submit their first CBAM report for the period from 1 October 2023 to 31 December 2023 no later than 31 January 2024. Corrections to the report can be made until 31 July 2024. For subsequent periods, quarterly CBAM reports must be submitted no later than one month after the end of the quarter. Failure to submit a CBAM report or the submission of incorrect data may result in a fine of between EUR 10.00 and EUR 50.00 for each tonne of greenhouse gas emissions not reported.

The full scope of the CBAM regulation will enter into force on 1 January 2026. From that moment on, only registered declarants will be allowed to import CBAM goods. CBAM certificates are then to be purchased at a price calculated by the European Commission. The price of the certificates will be calculated depending on the weekly average auction price of EU ETS allowances expressed in EUR/tonne of CO2 emitted. Customs authorities will be required to monitor the movement of CBAM goods and to deny import if undertaken by non-registered declarants.