CBAM Compliance: Shift to actual reporting from August 2024

As of August 2024, importers of emission-intensive goods within the EU face a significant shift on compliance requirements under the Carbon Border Adjustment Mechanism (“CBAM”).

Previously, importers could rely on standard values published by the European Commission (“Commission“) to report CO² emissions in their quarterly CBAM submissions. However, from 1 August 2024 onwards, the CBAM regulations mandate that importers must report actual emissions data, requiring to obtain specific information from producers. A tough challenge for companies, especially because of the complexity of supply chains and the reluctance of manufacturers to provide the necessary data.

The Commission has confirmed that the option to use standard emission values will no longer be extended. They emphasise the need for accurate emission reporting. Importers who struggle to obtain the necessary data, will have to prove that they have made every reasonable effort to comply, including documenting their attempts to gather the necessary data from suppliers. The German Emission Trading Authority stated (Deutsche Emissionshandelsstelle “DEHSt“) that they may use discretion in favour of importers who can prove that they did everything possible and therefore the use of the standard values was justified.

This regulatory shift has created uncertainty for importers, as it remains unclear what constitutes “reasonable efforts” in obtaining emissions data. As the CBAM implementation progresses, importers will need to navigate these complexities carefully, while hoping for more concrete guidance from authorities to ensure compliance and avoid substantial fines.