Regulation of carbon emissions in the EU will come into force in 2026

The European Commission (EC) has presented its proposal for a new carbon border management mechanism (CBAM), which will be fully operational from 2026.

CBAM was designed to “prevent the risk of carbon leakage and support the EU’s increased ambition to mitigate climate change, while ensuring WTO compliance,” explains the EC.

As a result, importers will need to offset the CO2 emissions associated with the production of purchased goods by purchasing emission certificates, as if the goods were produced in Europe. If a non-EU supplier can demonstrate that EU equivalent emission certificates have already been paid, they will be deducted by the importers.

“According to the Commission’s proposal, importers would be required to report the emissions contained in their products without making financial adjustments in a transition period starting in 2023 and ending at the end of 2025, which will allow time for the implementation of the final system,” the Commission’s statement explains. “After the final system is fully operational in 2026, EU importers will have to declare the quantity of goods and the quantity of embedded emissions in the total volume of goods imported into the EU in the previous year on an annual basis and submit the corresponding number of CBAM certificates.”

Carbon steel products will be included in CBAM, but stainless steel grades, special steels and pipes are not currently included. Members of the EU Parliament have already announced their request for the inclusion of some of the excluded products. For example, Italian parliamentarians sent a letter asking the European Community to include stainless steel to support the future of the Acciai Speciali Terni plant.

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