With less than two weeks until the start of the Carbon Border Adjustment Mechanism (CBAM) transitional period (1 October 2023 – 31 December 2025), the European Commission published the CBAM Implementing Regulation on the reporting obligations in the Official Journal of the European Union on 15 September 2023. During the transitional period, declarants are required to submit quarterly CBAM reports to the CBAM Transitional Registry no later than one month after the end of the relevant quarter. Below, we explain the key elements of the CBAM Implementing Regulation.


The CBAM Regulation entered into force on 17 May 2023. During the transitional period (1 October 2023 – 31 December 2025), declarants must submit quarterly CBAM reports that include: (i) the total quantity of imported goods; (ii) the direct and indirect emissions embedded in the imported goods; and (iii) any carbon price effectively paid in the country of origin for the embedded emissions.

On 13 June 2023, the European Commission communicated a draft Implementing Regulation on reporting obligations and conducted a public consultation until 11 July 2023. After reviewing comments from interested parties, on 17 August 2023, the Commission published the final text of the Implementing Regulation, two CBAM guidance documents, and an Excel template for reporting embedded emissions. On 15 September 2023, the Implementing Regulation was officially published in the Official Journal of the European Union.

Key elements of the Implementing Regulation

General comments: Compared to the draft Implementing Regulation, there are no major changes in the final text. However, with respect to the calculation of embedded emissions, the Commission deleted references to the “weighted average across all used production routes”. This means that operators can calculate actual embedded emissions by separating production processes without the weighted average of the embedded emissions.

Quarterly reports: Declarants placing CBAM goods on the European Union (EU) market must submit quarterly CBAM reports. Those reports must be submitted by a reporting declarant, who could be one of the following persons: (i) the importer lodging the customs declaration to release CBAM goods for free circulation; (ii) the person with authorisation to lodge a customs declaration who declares the import of CBAM goods; or (iii) the indirect customs representative.

Reporting elements: The CBAM report must include the following information:

  • Imported goods: (i) the total quantity of imported goods; and (ii) the type of goods, as identified by the EU Combined Nomenclature code.
  • Embedded emissions: (i) the country of origin of the imported goods; (ii) the installation where they were produced; (iii) the production route used and information on specific parameters qualifying the indicated production route chosen; (iv) for steel goods, the identification number of the specific steel mill; and (v) the amount of specific direct emissions of the goods (see Annex III).
  • Indirect emissions: (i) electricity consumption; (ii) confirmation of whether the declarant is reporting actual emissions or default values; (iii) the corresponding emissions factor; and (iv) the amount of specific indirect emissions (see Annex IV).
  • Carbon price paid in the country of origin for the embedded emissions: (i) the form of carbon price; (ii) the country of origin; (iii) any rebate or other form of compensation available in the country that would have resulted in a reduction of that carbon price; (iv) reference to the legal provisions that form the basis for the carbon price, the rebate or any other form of compensation; (v) the type of product, as identified by the CN code; (vi) the quantity of embedded emissions covered by the carbon price; (vii) the quantity of embedded emissions covered by any rebate or other form of compensation, including free allocations, if applicable; and (viii) the monetary amount.

Calculation of embedded emissions: The Implementing Regulation provides flexibility regarding the methods that can be used to calculate embedded emissions of CBAM goods during the transitional period. Reporting declarants will have the choice of reporting in one of the following three ways (but as of 1 January 2025, only the EU method will be accepted):

  • Reporting according to the EU method (see Annex III), using (i) the calculation-based approach or (ii) the measurement-based approach (the mandatory approach as of 1 January 2025);
  • Reporting based on equivalent third country national systems, which can be used until 31 December 2024; or
  • Reporting based on another method (e.g., default values to be published by the Commission), which can be used until 31 July 2024.

Default values: Default values, or estimations by non-EU operators, may be used for precursors of complex goods contributing up to 20% of the total for complex goods. At the time of writing this alert, the Commission has not published the default values, but it is expected that they will be published in the coming days before the transitional period starts.

Review of CBAM reports: The Commission may review CBAM reports to assess compliance with the reporting obligations within three months after the last CBAM report is submitted. Further, the competent authorities of EU member states where a reporting declarant is established must review and assess the data, information and list of reporting declarants. After 31 December 2025, the competent authorities may initiate a correction procedure in cases of incomplete or incorrect CBAM reports or failure to submit a CBAM report.

Penalty: A penalty will be imposed if the reporting declarant has not taken the necessary steps to comply with the reporting obligations or to correct the CBAM report. The penalty for each tonne of unreported embedded emissions will be between €10 and €50. This is significant, especially when compared with the price paid by EU producers for actual emissions: the price for a tonne of carbon under the EU Emission Trading Scheme is around €100, but most allowances are given out free of charge.

CBAM Transitional Registry:The Commission will establish an electronic database, the CBAM Transitional Registry, to collect the information reported during the transitional period. The CBAM Transitional Registry will enable communication, checks and information exchange between the Commission, the competent authorities, the customs authorities of the member states and reporting declarants.

Guidance documents and webinars

On 17 August 2023, the Commission published two guidance documents on the reporting obligations for EU importers of CBAM goods and non-EU installation operators, as well as a reporting template. The guidance documents explain the CBAM requirements for EU importers and non-EU operators of installations producing CBAM goods during the transitional period. Further, while the use of the reporting template in Excel is voluntary, the Commission stresses that the use of a common template greatly simplifies the communication.

Additionally, the Commission will host six online webinars in the coming weeks, which will cover general and sector-specific features of the CBAM. Interested stakeholders can register to participate in the webinars and will be able to ask questions, which will be answered live. The registration links, when active, will be available here.

  • Cement: 15 September 2023, 10am-11:30am (CET)
  • Aluminium: 21 September 2023, 2pm-3:30pm (CET)
  • Fertilisers: 26 September 2023, 11:30am-1pm (CET)
  • Electricity: 28 September 2023, 9:30am-11am (CET)
  • Hydrogen: 3 October 2023, 3:30pm-5pm (CET)
  • Iron and steel: 5 October 2023, 4pm-5:30pm (CET)

Looking ahead                                                        

When the transitional period starts on 1 October 2023, non-EU manufacturers of products currently in the CBAM scope will have to calculate accurately the emissions embedded in the goods they import and submit this information to EU importers. Using this information, EU importers will have to submit a quarterly CBAM report by 31 January 2024 for the period of October 2023 – December 2023.

Our previous publications on CBAM

Any questions? Please do not hesitate to get in touch with Reed Smith’s international trade, environment or ESG teams in Brussels, or your usual contact at Reed Smith.