The compatibility of CBAM with external ETS systems ensures equitable treatment for imported goods compared to EU products. Here’s how CBAM aligns with other ETS systems:
- Consideration of Actual Embedded Emissions: CBAM accounts for the “actual values” of embedded emissions, reflecting the decarbonization efforts of companies exporting to the EU. This results in lower CBAM payments for goods with reduced emissions.
- Uniform CBAM Certificate Price: The CBAM certificates required for importing goods align with those under the EU Emissions Trading System (ETS). This parity ensures fair and consistent carbon pricing between EU and non-EU producers.
- Deduction of Effective Carbon Prices: CBAM deducts the effective carbon prices paid outside the EU to prevent double pricing. For instance, if a third country operates an emissions trading system, the carbon price paid therein is subtracted from the CBAM adjustment.
Before the end of the transitional period, the European Commission will establish secondary legislation outlining rules and processes for considering effective carbon prices paid abroad. During this transitional phase, reporting declarants must report the carbon price due in the country of origin for embedded emissions in imported goods, accounting for any rebates or compensation available.
Dubrink’s software streamlines the alignment between CBAM and external ETS systems, ensuring compliance with regulations and facilitating transparent reporting. Importers can rely on our platform to navigate the complexities of carbon pricing mechanisms and seamlessly integrate with global emission trading frameworks