Carbon Border Adjustment Mechanism (CBAM) – The regulation was published in the Official Journal of the European Union

Prepared by Francesco Pizzo, Lorenzo Ontano and Andrea Primerano

On 16 May 2023, EU Regulation 2023/956 was published in the Official Journal of the European Union, establishing a carbon border adjustment mechanism (CBAM).

As indicated in article 1 of the Regulation, the objective of the CBAM is to address the issue of greenhouse gas emissions incorporated in the goods listed in Annex I of the same, at the time of their importation into the customs territory of the Union, to prevent the risk of carbon leakage outside the territory of the Union.

To date, the goods subject to CBAM rules are as follows (identified according to their Combined Nomenclature code):

  • Cement;
  • Electric energy;
  • Fertilizers;
  • Cast iron, iron and steel;
  • Aluminium;
  • Hydrogen.

The Regulation will not apply, however, to goods originating in the following countries: Iceland, Norway, Switzerland, and Liechtenstein.

The CBAM will enter into force progressively. During the transitional period, which will run from 1 October 2023 to 31 December 2025, each importer (or indirect customs representative) who, in a given quarter, has imported goods, will have to submit, for that quarter, a report (CBAM report) containing information on imported goods and the emissions incorporated therein, by the month following the relevant quarter.

Once the transitional period is closed, i.e. from January 2026, the goods subject to the CBAM will be imported into the customs territory of the Union only by authorized declarants.

The authorization will be granted only to operators who, further to an audit, will prove to meet reliability requirements like those already provided for obtaining the AEO qualification (e.g. the applicant must not have committed serious or repeated violations of customs and tax legislation, it must demonstrate that it has the financial and operational capacity to fulfill its obligations regarding CBAM, etc.). Authorized operators will then be recorded in a special register kept at EU Commission level.

When fully working, authorized persons will have to submit an annual declaration by 31 May of the year following the one in which the imports were performed and return the CBAM certificates corresponding to the emissions incorporated in the imported goods.

Finally, the Regulation provides for a special penalty regime for the infringement of the obligations deriving from the same.

Let’s Talk

For a deeper discussion, please contact:

Francesco Pizzo

PwC TLS Avvocati e Commercialisti


Lorenzo Ontano

PwC TLS Avvocati e Commercialisti


Andrea Primerano

PwC TLS Avvocati e Commercialisti