CBAM Implementing Regulation and Extensive Additional Reporting Guidance Published


Earlier this month, the European Commission (“EC”) adopted an Implementing Regulation (“IR”) and released extensive Guidance Documents (“Guidance”) on the practicalities of reporting requirements for the transitional phase of the EU’s Carbon Border Adjustment Mechanism (“CBAM”) framework. This first material phase of CBAM will commence on October 1, 2023 (“Transitional Period”). The Guidance complements the IR in providing vital instructions for both installation operators (exporters) outside the EU and importers of CBAM goods within the EU, to support a harmonised and efficient approach to reporting embedded emissions.

CBAM is an essential environmental and trade policy instrument aimed at ensuring that extra-EU imported goods share carbon costs equivalent to those incurred by EU-based operators. This applies to in-scope CBAM goods/commodities: cement, electricity, fertilisers, iron and steel, aluminium and hydrogen. This measure aligns carbon pricing and efforts to reduce “carbon leakage”, i.e. production shifts to countries with less ambitious decarbonisation policies.

Implementing Regulation

The IR (and accompanying Guidance covered below) establish a clear framework for operators falling within the CBAM requirements during the Transitional Period. It outlines reporting obligations, offering flexibility in the calculation of embedded emissions for imports during this phase. For the initial year i.e. 2023-24, companies have three reporting options, but from 1 January 2025, only the ‘EU method’ is permissible.

These three reporting options essentially comprise:

  • Full reporting according to the new EU method; or
  • Reporting based on an equivalent third-country national system; or
  • Using ‘default values,’ including those made available by the EC for the Transitional Period, where actual emissions data is not available from installation operators (i.e. third country exporters) until 31 July 2024.  

Particularly noteworthy is the clarification provided in the IR on the use of `default values` after 31 July 2024. The IR confirms that reporting declarants (i.e. EU importers) may rely on estimated values from non-EU exporters to calculate up to 20% of the total embedded emissions of complex goods. This comprehensive approach aims to ensure both regulatory compliance and gradual transition within sectors impacted by CBAM.


The Guidance provides strategic insights into critical facets such as emissions monitoring, reporting obligations, compliance cycles, and roles for both installation operators (exporters) outside the EU and importers within the EU for each of the goods falling within scope.

Guidance on CBAM implementation for installation operators outside the EU - exporters (“Guidance outside EU”)

This Guidance serves as a roadmap to crucial CBAM emission monitoring concepts, aimed at ‘installation operators’ situated outside the EU (i.e. third country exporters). The document is of significant length coming in at 266 pages including annexes, but is specifically stated to be not legally binding. This includes:

  • Quick guide for operators (exporters);
  • A roadmap to important CBAM emission monitoring concepts;
  • An introduction to CBAM compliance cycle, roles, responsibilities, milestones, and deadlines for operators outside the EU;
  • Details on production processes, value chains, and requirements for installation operators (exporters) producing CBAM goods;
  • Monitoring and reporting obligations for producers of CBAM goods, by sector;
  • Explanation on the collection, sampling, laboratory analyses, calculations, and documentation necessary for reporting; and
  • Exceptions.

Guidance on CBAM implementation for importers of goods into the EU (“Guidance inside EU”)

This Guidance is tailored to ‘reporting declarants’, generally importers but which can include the person, holding an authorisation to lodge a customs declaration referred to in the Union Customs Code, who declares the importation of goods; or the indirect customs representative, where the customs declaration is lodged by the indirect customs representative appointed when the importer is established outside the Union or where the indirect customs representative has agreed to the reporting obligations in accordance with Article 32 of the CBAM Regulation. It aims to streamline the reporting process and ensure consistency across the reporting framework. The document is similarly stated to be not legally binding. This includes:

  • Quick guide;
  • Summary on reporting obligations;
  • Overview of the compliance cycle, roles, responsibilities, and deadlines for reporting declarants;
  • Monitoring and reporting obligations for importers of CBAM goods, by sector;
  • A reporting template to simplify the communication of embedded emissions data from operators to importers;
  • Clarification on the importance of using a common reporting format for efficient communication;
  • Details the determination of specific embedded emissions of goods and reporting obligations for importers during the transitional phase; and
  • Exceptions.

Key dates and phases

  • The CBAM transitional phase runs from October 1, 2023, to December 31, 2025.
  • Importers, or ‘reporting declarants’, are required to submit quarterly reports within one month of the end of each reporting period.
  • The first quarterly report, covering October to December 2023, is due by January 31, 2024.

Post-transitional period: What comes next?

From 2026, CBAM will fully apply. That means from 1 January 2026 onwards, importers will have to surrender ‘CBAM certificates’, which they will be required to purchase at the average price of EU Emissions Trading System allowances, for every CBAM good imported into the EU. There will be a phase-in with increasing coverage of embedded emissions by the CBAM obligation. 

Our earlier summaries of CBAM are here.