The European Parliament has adopted a legislative resolution recognising the financial revenue from the CO2 border price adjustment mechanism (CBAM, the so-called carbon tax) as an own resource of the EU. This means that the tax will be part of the EU budget.
The entry into force of the new tax is getting closer. The tax is expected to become applicable as early as 1st January 2023 (in the initial phase only with regard to reporting, which if not complied with could mean financial penalties). It is the last moment to start preparations for this new regulation.
The CBAM regulations are intended to impose additional obligations on importers into the EU of the following products:
- cement (selected products from CN chapter 2523);
- electricity (CN 2716);
- fertilizers (including CN 2808, 2814, 2834, 3102, 3105);
- goods in the steel industry (selected products from CN chapter 72 and 73);
- aluminum (selected products from CN chapter 76);
- organic chemicals (CN chapter 28, 29);
- plastics and articles made from them (Chapter CN 39).
This regulation will apply to goods or products made from these goods which have been imported into the EU customs territory. The importer will have to apply for an import license obtained through a special procedure. The importer will have to prove that it is operating in accordance with tax and customs regulations and that it has the organisational and financial capacity to meet the obligations under CBAM regulation. Such an entity will also be required to obtain a special certificate against payment. The price of the certificate will be determined as the average price of the closing price of emission allowances (EU ETS) on the common auction platform for each calendar week.
It is worth mentioning that this proposal is a regulation that will have direct effect in every EU Member State.
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