An important deadline is approaching
CBAM reports should be submitted by 31 January 2024!
We have summarized the most important information regarding the carbon duty
CBAM reports are required to be submitted to the European Commission by 31 January 2024 by importers who imported goods covered by the CBAM Decree between 1 October and 31 December 2023. In our newsletter, we have summarised the most important information regarding the CBAM regulation, including the transitional rules applicable from 2024 and the obligations to be fulfilled thereafter.
The companies should be considered CBAM obligors if they import cement, electricity, fertilizers, iron and steel (e.g. rails, pipes, bolts, rivets, tanks), aluminium (wires, cables, other aluminium structures), and hydrogen from third countries into the EU. We note that the obligations may also be fulfilled by the importers' indirect customs representatives (and in some cases, e.g. if the importer is a third-country company, it is a mandatory requirement).
What are the key deadlines during the transition period?
During the transitional period from 1 October 2023 to 31 December 2025, the following obligations should be fulfilled:
- 22 - 31 January 2024: Registration in the CBAM transitional register.
From 22 January 2024, the obligors will have the possibility to submit an application for registration in the CBAM Transitional Registry to the National Climate Change Authority (i.e. the competent Hungarian CBAM authority). Based on the information received from the Authority, information on the registration and the submission of the quarterly reports below will be published on the same date.
- 31 January 2024: Submission deadline for the first quarterly reporting obligation, covering the last quarter of 2023.
During the transitional period, the obligors will be required to submit CBAM reports quarterly. The report to be submitted to the European Commission should include the mandatory data specified in the CBAM regulation (e.g. volume of imported goods, direct or indirect emissions embedded in them, and carbon price paid for emissions).
- 1 January 2025: It will be possible to obtain a CBAM declarant licence.
What can we expect after the transition period?
Authorised CBAM declarants are required to submit a CBAM declaration to the National Climate Change Authority by 31 May yearly (i.e. for the first time in 2027 for the year 2026).
The CBAM declaration should contain the following data:
- the quantity of imported goods,
- direct or indirect emissions embedded in them,
- the number of CBAM certificates to be returned the carbon price paid in the country of origin,
- copies of the verification reports issued by accredited verifiers.
What sanctions can be expected if somebody fails to comply with the CBAM obligations?
Obligors can expect sanctions if they fail to take the necessary steps to comply with the obligation to submit the CBAM report, for failing to submit the CBAM report, or for filling in the report incorrectly or incompletely if they have not taken the necessary steps to correct it.
The penalty range is from €10 to €50 per tonne for non-reported emissions. The level of the penalty increases in line with the European Index of Consumer Prices.
In determining the actual amount of the penalty, the Authority will take into account mitigating or qualifying circumstances (e.g.: the extent of unreported information, the unreported quantities of imported goods; the readiness of the reporting declarant to comply with requests for information or to correct the CBAM report).
Please note that higher penalties shall be applied when more than two incomplete or incorrect reports have been submitted in a row or the duration of the failure to report exceeds 6 months.
If your company is a CBAM obligor and you need professional support due to the tight submission deadline and the complexity of the regulation, VGD experts are at your disposal.
17 Jan, 2024
This newsletter provides general information and does not constitute advice.
