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CBAM's Administration


How it will work

Main stakeholders

The administration of CBAM

Declarants play a crucial role in the CBAM administration process.They are importers or indirect customs representatives responsible for submitting the necessary CBAM declarations and complying with the reporting and payment obligations. Declarants need to apply for authorized CBAM declarant status and provide accurate information regarding imported quantities, embedded emissions, and CBAM certificates to be surrendered.

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Customs authorities are responsible for overseeing the importation process and ensuring compliance with CBAM requirements. They work closely with declarants to verify the accuracy and completeness of CBAM declarations. Customs authorities have the authority to enforce penalties and take appropriate actions in case of non-compliance.

Customs Authorities

European Commission (EC)

The European Commission plays a central role in the administration of CBAM. It is responsible for setting the overall framework, rules, and guidelines related to CBAM implementation. The EC receives CBAM reports during the transitional period and manages the CBAM registry, which serves as a central platform for recording CBAM certificates and monitoring compliance. The Commission also assesses and addresses any circumvention practices.

National authorities of each EU Member State have an important role in implementing CBAM within their respective jurisdictions. They are responsible for granting authorized CBAM declarant status to importers or indirect customs representatives and overseeing the purchase and surrender of CBAM certificates. National authorities work in coordination with the European Commission to ensure consistent implementation of CBAM across the EU. .

National Authorities

Under CBAM, the categorization of emissions follows certain principles to determine the treatment of emissions associated with imported goods. The principles of emission categorization under CBAM include:I

Principles of Emission Categorisation

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CBAM considers direct emissions, which are emissions generated from the production processes of the imported goods. This includes emissions released during the manufacturing, processing, or other relevant activities involved in the production of the goods.

Direct Emissions

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CBAM also takes into account indirect emissions associated with the production of electricity consumed during the production processes of the imported goods. Indirect emissions result from the generation of electricity used in the manufacturing or processing stages of the goods. .

Indirect Emissions

Stakeholders contribution

The Carbon Border Adjustment Mechanism (CBAM) involves several stakeholders who play important roles in its implementation and impact. Each stakeholder involved in the Carbon Border Adjustment Mechanism (CBAM) can make unique contributions based on their roles and perspectives. The engagement and collaboration among these stakeholders are crucial to ensuring the successful implementation and effectiveness of the mechanism in achieving its climate and trade objectives.

The CBAM proposal seeks to account for both direct and indirect emissions associated with the production of goods imported into a jurisdiction. It aims to ensure that imported goods face similar carbon costs as domestically produced goods, thus preventing carbon leakage (where emissions are shifted from one jurisdiction to another) and creating a level playing field for domestic industries. The specific details and implementation of CBAM may vary depending on the jurisdiction and the specific policies in place. It's important to note that as of my knowledge cutoff in September 2021, CBAM was still under development and had not been fully implemented in any jurisdiction. Therefore, it is advisable to consult the latest information from relevant authorities or experts to get the most up-to-date information on CBAM.

Authorization of Declarants

A competent authority shall authorize a declarant who fulfills certain conditions, including: a) not having a record of serious criminal offences related to economic activity b) demonstrating financial and operational capacity to fulfill obligations under the regulation.

If authorization is refused, the declarant can object to a relevant authority under national law. An authorized declarant can ask for revocation of their authorization anytime.A guarantee is required to authorize a declarant who was not established throughout the two preceding financial years.