Carbon Border Adjustment Mechanism (CBAM)

What You Need to Know

The Carbon Border Adjustment Mechanism (CBAM) is governed by Regulation (EU) 2023/956 and Commission Implementing Regulation (EU) 2023/1773. CBAM addresses carbon leakage, which happens when companies move their production to countries with less strict emission regulations.

CBAM aims to level the playing field by putting a fair price on the carbon emitted during the production of carbon-intensive goods entering the EU. This encourages cleaner industrial production globally. It aligns with the phase-out of free allowances under the EU Emissions Trading System to support EU industry decarbonisation.

CBAM targets imports of cement, iron & steel, aluminium, fertiliser, hydrogen, and electricity into the EU from non-EU countries, for consignments worth over €150. The Transitional Period runs from October 1, 2023, to December 31, 2025, followed by the Definitive Period starting January 1, 2026.

During the Transitional Period, importers shall register for a CBAM account and report the emissions of their CBAM goods. During the Definitive Period, importers will need to buy CBAM certificates, priced according to the weekly average auction price of the EU ETS allowances in Euro/tonne of CO2 emitted.

The Climate Action Authority is the National Competent Authority for CBAM. You can reach us at cbam@mra.org.mt.

For more details, refer to Regulation (EU) 2023/956: CBAM Regulation PDF.

Check out the European Commission’s CBAM page for comprehensive information: European Commission CBAM Page.

Goods Affected by CBAM

CBAM applies to goods listed under the Combined Nomenclature (CN) codes in Annex I to the Regulation, which includes:

  • Cement
  • Electricity
  • Fertilisers
  • Iron and Steel
  • Aluminium
  • Hydrogen

Registration & Guidance for CBAM Declarants

CBAM Periods and Obligations

Transitional Period (Oct 1, 2023 – Dec 31, 2025):

  • Importers must report quarterly to the European Commission on the quantity of imported goods, direct and indirect emissions, and optionally related carbon costs in the country of origin.
  • Reports are due one month after each quarter.
  • No verification by independent accredited verifiers is required, but importers may seek verification voluntarily.
  • No obligation to surrender CBAM certificates during this period.
  • Reporting is done through a web-based system hosted by the European Commission.

Definitive Period (from Jan 1, 2026):

  • By May 31 each year, starting from 2027 for the year 2026, CBAM declarants must submit an annual report on imported goods and embedded emissions, along with verification reports, and surrender the corresponding CBAM certificates,
  • Processes will be conducted through a CBAM registry established by the European Commission.

Importers, Indirect Customs Representatives, and Authorised Declarants

Transitional Period:

  • Reporting is done by the importer or an indirect customs representative, if applicable.
  • Importers not established in an EU Member State must have an indirect customs representative fulfill the reporting obligation.
  • Notifications of reporting obligations will be sent via the Customs TARIC system.
  • Application for authorisation of CBAM declarants or indirect customs representatives starts.

Definitive Period:

  • Application for authorisation of CBAM declarants or indirect customs representatives continues.
  • Reporting and surrendering of CBAM certificates will be handled by the authorised CBAM declarant.
  • Information on the authorisation process will be provided in due course.

Resources

Contacting the Competent Authority

For more information, contact the Climate Action Authority at cbam@mra.org.mt or call 23850510, 23850516 or 23850514.