Carbon Border Adjustment Mechanism (CBAM) in the SME sector

The Carbon Border Adjustment Mechanism (CBAM) is part of the EU's "Fit for 55" package and aims to reduce emissions in the European Union by at least 55% by 2030. This mechanism affects numerous industries and companies in the EU that import certain products from non-EU countries, including iron, steel, cement, aluminum and hydrogen. Companies have been obliged to report for the first time since October 1, 2023, the start of the transition phase.

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What is CBAM?

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CBAM was introduced to reduce the risk of carbon leakage. This occurs when companies relocate their production to countries with less stringent environmental regulations in order to avoid emissions costs. CBAM is intended to ensure that EU emission reduction efforts are not undermined by such evasive action.

Companies that import CBAM-relevant products must purchase CO2 certificates for them. These certificates represent the emissions generated during the production of the goods outside the EU.

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Who is affected by CBAM?

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CBAM affects a wide range of sectors, including the electrical, metal and plastics industries, the packaging sector and mechanical engineering. All companies that import CBAM-relevant products into the EU are obliged to report and must provide detailed information on emissions and product volumes on a quarterly basis.

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The CBAM obligations at a glance

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Companies that import goods subject to CBAM must:

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• Calculate all direct and indirect emissions of your imported products.
• Submit quarterly reports on emissions and the volume of imported goods.
• Purchase a special emissions certificate for each affected product and surrender the correct number of CBAM certificates each year.

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Violations of the reporting obligations are subject to penalties of between 10 and 50 euros per unreported ton of CO2, depending on the severity of the offense.

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CBAM compliance with Tacto: 5 steps to simple implementation

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Tacto offers a comprehensive solution to help companies comply with CBAM:

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1st CBAM Quick Scan: Identification of CBAM-relevant articles and suppliers based on country of origin and evaluation of the affected product portfolio.

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2. automated data queries: sending CBAM queries to supplier groups and automatic tracking and evaluation of responses.

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3. item-specific detailed queries: detailed analyses at item level for complete transparency.

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4th CBAM report at the touch of a button: Automatic generation of the CBAM report and continuous documentation.

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5. training and advice: special training and up-to-date information on CBAM and relevant legal developments.

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Why act now?

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The requirements of CBAM affect not only the companies themselves, but also their supply chains. To avoid heavy fines and supply chain disruptions, it is important for companies to ensure their CBAM compliance at an early stage. A thorough analysis and a solid compliance program can also create a sustainable competitive advantage by increasing transparency and reducing emissions in the long term.

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For detailed guidance and more information on CBAM, download our white paper "Carbon Border Adjustment Mechanism (CBAM) in SMEs: Legal reporting obligations since October 2023" and learn how Tacto can help you comply with CBAM regulations.

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