The CBAM is the EU landmark tool to fight the so-called carbon leakage, a trend that occurs when companies relocate carbon-intensive production outside the EU to avoid EU rules limiting emissions. The CBAM regulation, adopted in May 2023, encourages responsible behavior by companies, making carbon-intensive products manufactured in third countries less attractive than cleaner EU products.
On 1 October 2023, the CBAM entered in its transitional phase, with the first reporting period for importers ending on 31 January 2024. At this stage, the CBAM will apply only to imports of cement, iron and steel, aluminium, fertilizer, electricity and hydrogen and the importers should report the emissions incorporated during their production, without paying any financial adjustment. This phase is necessary both to enable all stakeholders to understand its functioning and to allow the Commission collect useful information to refine the methodology for the final period, which will begin in 2026.