Importers of electricity in the EU face new challenges


On 1 October 2023, the Transitional period of the Carbon border adjustment mechanism (CBAM) went into effect with additional reporting obligations for importers of electricity to the EU.

The importers of “CBAM goods” include cement, iron and steel, aluminium, fertilisers and hydrogen as well as electricity.

CBAM provides for two periods, a Transitional period with reporting obligations only before the the Definitive period commences on 1 January 2026 when importers will need to purchase CBAM certificates from the competent authorities of EU member states in order to import CBAM goods into the EU.

During the Transitional period, importers of electricity under CN code 2716 00 00 will need to report imported MWhs by a specific formula expressing the CO2 emissions used for production of the electricity. Calculations will be made using primarily International Energy Agency (IEA) database for CO2 emissions.

Reporting entities will be considered one of the following:

  • the entity that appears as importer in the customs declaration;
  • the entity to which the transmission capacity has been allocated; or
  • the entity that nominated specific capacity for import.

CBAM reporting, however, will apply to actual trading only and does not cover trade via anonymous exchange-based platforms. In cases where the importer appoints an indirect customs representative, the latter may be engaged as the reporting agent.

The reports will include data on the imported MWhs of electricity, country of origin, direct emissions and carbon price due in the jurisdiction (if any). The reporting will be performed through the CBAM Transitional Registry, which is the toll designed to perform CBAM-related tasks and ensures confidentiality.

The first reporting period will encompass October, November and December, where the report will be due by 31 January 2024.

For more details CBAM and energy policies in the EU, contact your CMS client partner or these local CMS experts: Alexander Rangelov and Nikola Naydenov.