Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism (Text with EEA relevance)

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

Subject matter

Article 2

Scope

The Commission shall adopt implementing acts laying down detailed conditions for the application of the CBAM to such goods, in particular as regards the notions equivalent to those of importation into the customs territory of the Union and of release for free circulation, as regards the procedures relating to the submission of the CBAM declaration in respect of such goods and the controls to be carried out by customs authorities. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2) of this Regulation.

This Regulation shall not apply to:

(a) electricity generated on the continental shelf or in the exclusive economic zone of a Member State or of a country or territory listed in points 1 and 2 of Annex III;

(b) hydrogen originating on the continental shelf or in the exclusive economic zone of a Member State or of a country or territory listed in point 1 of Annex III.

Third countries and territories shall be listed in point 1 of Annex III where they fulfil all the following conditions:

(a) the EU ETS applies to that third country or territory or an agreement has been concluded between that third country or territory and the Union fully linking the EU ETS and the emission trading system of that third country or territory;

(b) the carbon price paid in the country in which the goods originate is effectively charged on the greenhouse gas emissions embedded in those goods without any rebates beyond those also applied in accordance with the EU ETS.

If a third country or territory has an electricity market which is integrated with the Union internal market for electricity through market coupling, and there is no technical solution for the application of the CBAM to the importation of electricity into the customs territory of the Union from that third country or territory, such importation of electricity from that country or territory shall be exempt from the application of the CBAM, provided that the Commission has assessed that all of the following conditions have been fulfilled in accordance with paragraph 8:

(a) the third country or territory has concluded an agreement with the Union which sets out an obligation to apply Union law in the field of electricity, including the legislation on the development of renewable energy sources, as well as other rules in the field of energy, environment and competition;

(b) the domestic legislation in that third country or territory implements the main provisions of Union electricity market legislation, including on the development of renewable energy sources and the market coupling of electricity markets;

(c) the third country or territory has submitted a roadmap to the Commission which contains a timetable for the adoption of measures to implement the conditions set out in points (d) and (e);

(d) the third country or territory has committed to climate neutrality by 2050 and, where applicable, has accordingly formally formulated and communicated to the United Nations Framework Convention on Climate Change (UNFCCC) a mid-century, long-term low greenhouse gas emissions development strategy aligned with that objective, and has implemented that commitment in its domestic legislation;

(e) the third country or territory has, when implementing the roadmap referred to in point (c), demonstrated its fulfilment of the set deadlines and the substantial progress towards the alignment of domestic legislation with Union law in the field of climate action on the basis of that roadmap, including towards carbon pricing at a level equivalent to that in the Union in particular insofar as the generation of electricity is concerned; the implementation of an emissions trading system for electricity, with a price equivalent to the EU ETS, is to be finalised by 1 January 2030;

(f) the third country or territory has put in place an effective system to prevent indirect import of electricity into the Union from other third countries or territories that do not fulfil the conditions set out in points (a) to (e).

A third country or territory listed in point 2 of Annex III shall be removed from that list where one or more of the following conditions applies:

(a) the Commission has reasons to consider that that third country or territory has not shown sufficient progress to comply with one of the conditions set out in paragraph 7, or that third country or territory has taken action that is incompatible with the objectives set out in the Union climate and environmental legislation;

(b) that third country or territory has taken steps that are contrary to its decarbonisation objectives, such as providing public support for the establishment of new generation capacity that emits more than 550 grammes of carbon dioxide (‘CO2’) of fossil fuel origin per kilowatt-hour of electricity;

(c) the Commission has evidence that, as a result of increased exports of electricity to the Union, the emissions per kilowatt-hour of electricity produced in that third country or territory have increased by at least 5 % compared to 1 January 2026.

Article 2a

De minimis exemption

Article 3

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘goods’ means goods listed in Annex I;

(2) ‘greenhouse gases’ means greenhouse gases as specified in Annex I in relation to each of the goods listed in that Annex;

(3) ‘emissions’ means the release of greenhouse gases into the atmosphere from the production of goods;

(4) ‘importation’ means release for free circulation as provided for in Article 201 of Regulation (EU) No 952/2013;

(5) ‘EU ETS’ means the system for greenhouse gas emissions allowance trading within the Union in respect of activities listed in Annex I to Directive 2003/87/EC other than aviation activities;

(6) ‘customs territory of the Union’ means the territory defined in Article 4 of Regulation (EU) No 952/2013;

(7) ‘third country’ means a country or territory outside the customs territory of the Union;

(8) ‘continental shelf’ means a continental shelf as defined in Article 76 of the United Nations Convention on the Law of the Sea;

(9) ‘exclusive economic zone’ means an exclusive economic zone as defined in Article 55 of the United Nations Convention on the Law of the Sea and which has been declared as an exclusive economic zone by a Member State pursuant to that convention;

(10) ‘intrinsic value’ means the intrinsic value for commercial goods as defined in Article 1, point (48), of Delegated Regulation (EU) 2015/2446;

(11) ‘market coupling’ means the allocation of transmission capacity through a Union system which simultaneously matches orders and allocates cross-zonal capacities as set out in Regulation (EU) 2015/1222;

(12) ‘explicit capacity allocation’ means the allocation of cross-border transmission capacity separate from the trade of electricity;

(13) ‘competent authority’ means the authority designated by each Member State in accordance with Article 11;

(14) ‘customs authorities’ means the customs administrations of Member States as defined in Article 5, point (1), of Regulation (EU) No 952/2013;

(15) ‘importer’ means either the person lodging a customs declaration for release for free circulation of goods or a bill of discharge in accordance with Article 175(5) of Delegated Regulation (EU) 2015/2446 in its own name and on its own behalf or, where the customs declaration is lodged by an indirect customs representative in accordance with Article 18 of Regulation (EU) No 952/2013, the person on whose behalf such a declaration is lodged;

(16) ‘customs declarant’ means a declarant as defined in Article 5, point (15), of Regulation (EU) No 952/2013 lodging a customs declaration for release for free circulation of goods in its own name or the person in whose name such a declaration is lodged;

(17) ‘authorised CBAM declarant’ means a person authorised by a competent authority in accordance with Article 17;

(18) ‘person’ means a natural person, a legal person or any association of persons which is not a legal person but which is recognised under Union or national law as having the capacity to perform legal acts;

(19) ‘established in a Member State’ means: (a) in the case of a natural person, any person whose place of residence is in a Member State; (b) in the case of a legal person or an association of persons, any person whose registered office, central headquarters or permanent business establishment is in a Member State;

(20) ‘Economic Operators Registration and Identification number (EORI number)’ means the number assigned by the customs authority when the registration for customs purposes has been carried out in accordance with Article 9 of Regulation (EU) No 952/2013;

(21) ‘direct emissions’ means emissions from the production processes of goods, including emissions from the production of heating and cooling that is consumed during the production processes, irrespective of the location of the production of the heating or cooling;

(22) ‘embedded emissions’ means direct emissions released during the production of goods and indirect emissions from the production of electricity that is consumed during the production processes, calculated in accordance with the methods set out in Annex IV and further specified in the implementing acts adopted pursuant to Article 7(7);

(23) ‘tonne of CO2e’ means one metric tonne of CO2, or an amount of any other greenhouse gas listed in Annex I with an equivalent global warming potential;

(24) ‘CBAM certificate’ means a certificate in electronic format corresponding to one tonne of CO2e of embedded emissions in goods;

(25) ‘surrender’ means offsetting of CBAM certificates against the declared embedded emissions in imported goods or against the embedded emissions in imported goods that should have been declared;

(26) ‘production processes’ means the chemical and physical processes carried out to produce goods in an installation;

(27) ‘default value’ means a value, which is calculated or drawn from secondary data, which represents the embedded emissions in goods;

(28) ‘actual emissions’ means the emissions calculated based on primary data from the production processes of goods and from the production of electricity consumed during those processes as determined in accordance with the methods set out in Annex IV;

(29) ‘carbon price’ means the monetary amount paid in a third country, under a carbon emissions reduction scheme, in the form of a tax, levy or fee or in the form of emission allowances under a greenhouse gas emissions trading system, calculated on greenhouse gases covered by such a measure, and released during the production of goods;

(30) ‘installation’ means a stationary technical unit where a production process is carried out;

(31) “operator” means any person that operates or controls an installation in a third country, including a parent company that controls an installation in a third country;

(32) ‘national accreditation body’ means a national accreditation body as appointed by each Member State pursuant to Article 4(1) of Regulation (EC) No 765/2008;

(33) ‘EU ETS allowance’ means an allowance as defined in Article 3, point (a), of Directive 2003/87/EC in respect of activities listed in Annex I to that Directive other than aviation activities;

(34) ‘indirect emissions’ means emissions from the production of electricity which is consumed during the production processes of goods, irrespective of the location of the production of the consumed electricity.

CHAPTER II

OBLIGATIONS AND RIGHTS OF AUTHORISED CBAM DECLARANTS

Article 4

Importation of goods

Goods shall be imported into the customs territory of the Union only by an authorised CBAM declarant.

Article 5

Application for authorisation

The competent authority of the Member State in which the customs declaration has been lodged shall register the person in the CBAM registry.

The application for an authorisation shall include the following information about the applicant:

(a) name, address and contact information;

(b) EORI number;

(c) main economic activity carried out in the Union;

(d) certification by the tax authority in the Member State where the applicant is established that the applicant is not subject to an outstanding recovery order for national tax debts;

(e) declaration of honour that the applicant was not involved in any serious infringements or repeated infringements of customs legislation, taxation rules or market abuse rules during the five years preceding the year of the application, including that it has no record of serious criminal offences relating to its economic activity;

(f) information necessary to demonstrate the applicant’s financial and operational capacity to fulfil its obligations under this Regulation and, if decided by the competent authority on the basis of a risk assessment, supporting documents confirming that information, such as the profit and loss account and the balance sheet for up to the last three financial years for which the accounts were closed;

(g) estimated quantity of imports of goods into the customs territory of the Union by type of goods and information on the Member States of import, for the calendar year during which the application is submitted, and for the following calendar year;

(ga) the number of the authorised economic operator (AEO) certificate, if the applicant has been granted the status of an authorised economic operator in accordance with Article 38 of Regulation (EU) No 952/2013;

(h) names and contact information of the persons on behalf of whom the applicant is acting, if applicable.

Article 6

CBAM declaration

The CBAM declaration shall contain the following information:

(a) the total quantity of each type of goods imported during the preceding calendar year, expressed in megawatt-hours for electricity and in tonnes for other goods, including the imported goods below the single mass-based threshold;

(b) the total embedded emissions in the goods referred to in point (a) of this paragraph, expressed in tonnes of CO2e emissions per megawatt-hour of electricity or, for other goods, in tonnes of CO2e emissions per tonne of each type of goods, calculated in accordance with Article 7 and, where the embedded emissions are determined on the basis of actual emissions, verified in accordance with Article 8;

(c) the total number of CBAM certificates to be surrendered, corresponding to the total embedded emissions referred to in point (b) of this paragraph after the reduction that is due on the account of the carbon price paid in a third country in accordance with Article 9 and the adjustment necessary to reflect the extent to which EU ETS allowances are allocated free of charge in accordance with Article 31;

(d) where applicable, copies of verification reports, issued by accredited verifiers, under Article 8 and Annex VI.

Article 7

Calculation of embedded emissions

Embedded emissions in goods other than electricity shall be determined:

(a) based on the actual emissions in accordance with the methods set out in points 2 and 3 of Annex IV; or

(b) by reference to default values in accordance with the methods set out in point 4.1 of Annex IV.

The Commission is empowered to adopt implementing acts concerning:

(a) the application of the elements of the calculation methods set out in Annex IV, including determining system boundaries of production processes, which shall be aligned with those covered by the EU ETS, and relevant input materials (precursors), emission factors, installation-specific values of actual emissions and default values and their respective application to individual goods, as well as lay down methods to ensure the reliability of data on the basis of which the default values shall be determined, including the level of detail of the data, and including further specification of goods that are to be considered as “simple goods” and “complex goods” for the purpose of point 1 of Annex IV. Those implementing acts shall also specify the elements of evidence demonstrating that the criteria required to justify the use of actual emissions for imported electricity and for electricity consumed in the production processes of goods for the purposes of paragraphs 2, 3 and 4 that are listed in points 5 and 6 of Annex IV are met; and

(b) the application of the elements of the calculation methods pursuant to paragraph 4 in accordance with point 4.3 of Annex IV.

Where objectively justified, the implementing acts referred to in the first subparagraph shall provide that default values can be adapted to particular areas, regions or countries to take into account specific objective factors that affect emissions, such as prevailing energy sources or industrial processes. Those implementing acts shall build upon existing legislation for the monitoring and verification of emissions and activity data for installations covered by Directive 2003/87/EC, in particular Commission Implementing Regulation (EU) 2018/2066 (²), Implementing Regulation (EU) 2018/2067 and Commission Delegated Regulation (EU) 2019/331 (³). Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2) of this Regulation.

Article 8

Verification of embedded emissions

The Commission is empowered to adopt implementing acts for the application of the verification principles set out in Annex VI as regards:

(a) the possibility to waive, in duly justified circumstances and without putting at risk a reliable estimation of the embedded emissions, the obligation for the verifier to visit the installation where relevant goods are produced;

(b) the definition of thresholds for deciding whether misstatements or non-conformities are material; and

(c) the supporting documentation needed for the verification report, including its format.

Where it adopts the implementing acts referred to in the first subparagraph, the Commission shall seek equivalence and coherence with the procedures set out in Implementing Regulation (EU) 2018/2067. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 29(2) of this Regulation.

Article 9

Carbon price paid in a third country

As from 2027, the Commission may, for third countries where carbon pricing rules are in place, determine and make available, in the CBAM registry referred to in Article 14, the default carbon prices for those third countries and publish the methodology for their calculation. The Commission shall do so on the basis of the best available data from reliable, publicly available information and information provided by those third countries. The Commission shall take into account any rebate or other form of compensation available in the relevant third country that would have resulted in a reduction of the default carbon price.

Article 10

Registration of operators and of installations in third countries