The CBAM & how our experts can help with your obligations
22/12/23
The EU CBAM covers products from certain sectors, such as cement, iron and steel, aluminium, fertilisers, hydrogen and electricity, and will broadly require importers to initially report (and eventually pay for) the embedded emissions within the CBAM products imported.
For each product in the scope of CBAM, importers (and by extension their suppliers) will be required to report on the following items (noting this is a non-exhaustive list):
- The types and quantities of CBAM goods imported;
- The country of origin of the goods and the carbon price paid in that country;
- The installation the goods were produced at (UN/LOCODE, name, address) and geographical coordinates of the installations main emissions source;
- The embedded emissions (incl. calculation methodology) and production route of the goods (reflecting the goods production process & technological options used); and
- The accepted calculation methodology and reporting requirements for embedded emissions, which will become increasingly strenuous over the course of the Transitional Period.
The CBAM is a complex and novel policy that will have significant implications for businesses that trade with the EU, as well as for their supply chains and customers. The CBAM will create new compliance obligations, reporting requirements, administrative costs and potential supplier challenges. In addition, it will also create new incentives and opportunities for decarbonisation and innovation within an organisation's supply chain.
How can PwC help?
At PwC we can assist in preparing and reviewing your first quarterly CBAM report, which is due by 31 January 2024. We have the experience to support you in reviewing your draft CBAM report for completeness and help you ensure you have completed all mandatory information required. We are also able to review this draft report based on the actual calculations completed (by you or your supplier), or by using the default values (which we expect to be published shortly).
We have a dedicated team of experts who can help you understand and prepare for the CBAM and the impacts it will have on your business. For example, we can help you with the following actions (alongside the preparation of the first report):
- Assessing the CBAM Regulation and how it will apply to your organisation, based on your product portfolio, origin and destination markets, and estimated embedded emissions footprint;
- Supporting you with the EU customs considerations, such as the classification, valuation and origin of your goods, the registration and declaration of your imports and engaging with your Indirect Customs Representative (if relevant); and
- Support you in considering how to engage and work with your supply chain on gathering the required CBAM information, such as the embedded emissions, confirming the production processes used for each good type and reviewing the domestic carbon pricing applied.
In addition, once the first quarterly report has been completed, PwC is well positioned to support you on longer term considerations, such as:
- Considering and preparing a roadmap for CBAM compliance, including helping you to anticipate and adapt to the evolving CBAM regulatory landscape, stakeholder expectations and supplier dynamics. We can also help with establishing governance, conducting scenario analysis, risk assessments, impact evaluation and action planning, to improve your CBAM readiness and resilience; and
- We can also help you with the analysis, planning, execution and monitoring of decarbonisation projects, which may help reduce your CBAM embedded emissions (if relevant), as well as with the communication and disclosure of your performance and achievements.
If you are interested in learning more about the CBAM and how PwC can help you, please contact one of our CBAM subject matter experts listed below. We would be happy to discuss your specific needs and challenges, and to provide you with tailored and pragmatic advice and support.
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