CBAM Report Delay: What EU Exporters Need to Know

On January 29,2024,the European Union’s Directorate-General for Taxation and Customs Union issued a temporary announcement regarding the filing period for the Carbon Border Adjustment Mechanism (CBAM),announcing that the initial filing deadline,which was originally set for January 31,had been extended.This decision was made due to technical issues that prevented some companies from submitting the relevant reports on time.This extension is good news for exporters to the European Union.

I.Regulatory Details of the Extension of CBAM Transitional Period Filing

Background and Decision of the Extension

The European Commission noticed that due to system technical issues,some enterprises faced difficulties in completing the submission of CBAM - related reports within the specified time.To address this issue,the Commission specifically introduced solutions for report filers,including providing a new function for deferred submission.

Specific Measures for Deferred Submission

(a) Introduction of the New Function: From February 1,2024,applicants can "apply for a delay in submission" in the system,which will provide applicants with an additional 30 days to submit their CBAM reports for the current quarter.

(b) Penalty Exemption: According to the guidance of the National Competent Authority (NCA),filers who encounter difficulties in submitting the first CBAM report will not be subject to any penalties.

(c) Report Modification: According to the Implementing Rules for the Transitional Period (Regulation 2023/1773),after the submission of this report,the declarant still has the right to modify it before July 31,2024.

Analysis of the Benefits for Exporters to the EU

The deferred submission of the first CBAM report provides EU importers with more time to collect supplier data and information.This also means that exporters to the EU have more time to collect information,conduct actual carbon emission calculations,and provide more sufficient preparation time for subsequent compliance and response work.

II.Countermeasures Suggestions for Exporters to the EU

Carry out the Calculation of Embedded Carbon Emissions in Products

Exporters should take advantage of the opportunity of deferred submission to carry out the calculation of embedded carbon emissions in products.This includes requiring their own suppliers to provide the embedded emission data per unit of raw materials,so as to ensure the acquisition of the actual carbon emission information of export products.

Compliance Response and Reduction of Carbon Costs

(a) Compliance Preparation: Exporters need to make full use of the extended time to ensure their full compliance with CBAM requirements.This includes understanding the regulatory requirements,calculation methods,and reporting processes of CBAM.

(b) Energy Conservation and Emission Reduction Measures: Exporters should assess and implement energy conservation and emission reduction measures to reduce the embedded carbon emissions of products,thereby reducing the potential cost increase caused by CBAM.

(c) Cooperation with the Supply Chain: Strengthen cooperation with suppliers to ensure that every link in the supply chain can effectively respond to CBAM requirements and work together to reduce overall carbon emissions.

The extension of the EU CBAM report transition period provides enterprises with a valuable time window to better prepare for and adapt to the new carbon emission reporting requirements.