Carbon Border Adjustment Mechanism (CBAM)
Carbon Tax on Imported Goods in the European Single Market
As the EU raises its own climate ambition, but less stringent environmental and climate policies prevail in non-EU countries, there is a strong risk of ‘carbon leakage’, which can shift emissions outside of Europe and seriously undermine EU and global climate efforts.
Carbon leakage occurs when industries transfer polluting production to other countries with less stringent climate policies, or when EU products are replaced by more carbon-intensive imports. To prevent this leakage, the Carbon Border Adjustment Mechanism (CBAM) is the new mechanism for imports of goods that puts a fair price on the carbon emitted during production. CBAM is meant to support the EU's increased ambition on climate mitigation while ensuring WTO compatibility.
Under the CBAM regulation, EU importers have to declare the quantity of goods imported and buy carbon certificates corresponding to the embedded emissions and carbon price that would have been paid if the goods had been produced under the EU's carbon pricing rules.
The rollout for this regulation will be in phases, with the transition period starting from October 1st, 2023 to December 2025. It will start applying to industries producing with higher risk of carbon leakage and with high carbon emissions, such as: cements, iron and steel, aluminium, fertilisers, hydrogen and electricity.
DNV offers the following services to support companies build and implement a CBAM strategy:
- Gap assessement in the light of the CBAM implementation for both administrative and technical requirements
- Assurance services including comprehensive review of processes, methodologies, data elements (availability and quality) needed to fulfil expected CBAM compliance obligations
- Digital services for calculating emissions embedded in the production of affected products
- Verification of emissions GHG inventories, calculation, and reporting procedures along the entire value chain
- Implementation of a Digital Product Passport solution to provide digital assurance to the entire declaration process
This offering is part of the wide DNV sustainability services portfolio that includes validation of environmental performance assessment, carbon footprinting and Supply Chain traceability services. In addition, DNV offers a unique Digital Product Passport service to its customers, which enables them to meet the requirements for digital availability of compliance information, as well as additional communication and post-market traceability services.
Reach out to our team of experts to know if your products will be subject to this regulation and see how we can support in your overall EU Green Deal strategy and compliance needs.
