Assessing the EU CBAM: Reporting Rules for the World’s First Carbon Import Fee

In August, the EU unveiled its implementing regulation for the initial stage of the Carbon Border Adjustment Mechanism (CBAM), effective from October 1, 2023, to December 31, 2025. This transitional period will require that importers report specific emissions data associated with the production of iron and steel, aluminum, cement, fertilizers, hydrogen, and electricity imported into the EU. Beginning in 2026, importers will be required to pay a fee on those emissions. This paper provides an overview of the implementing regulation and critical analysis on its potential implications.