circular economy,  compliance e AEO,  made in

CBAM, updated frequently questions and answer for a compliance check

Marzo 3, 2024 /

On 28 February 2024 the European Commission published the new CBAM frequently questions & answers (FAQ) which modify the points n. 10, 12, 27, 28, 30, 44, 50, 56, 68, 91, 92, 99 of their last version.

In particular, the new point n.10:

QUESTION N.10: “Does the CBAM apply to ‘returned goods’?

ANSWER N.10: “Returned goods are goods defined in Article 203 of the Union Customs Code (Regulation (EU) No 952/2013).

  • They are goods that are released for free circulation and benefit from duty exemption because they were Union goods before, either because they have originally been exported as Union goods or  because they were previously released for free circulation, and because they fulfil certain conditions (e.g. they are released for free circulation within three years after they were previously exported). The conditions under which those goods qualify as returned goods are laid down in the customs legislation, and competent customs authorities assess whether these conditions are fulfilled when the goods are declared for release for free circulation in the EU.
  • During the transitional period, CBAM reporting obligations do not apply to returned goods as defined in Article 203 of the Union Customs Code. As a result, the embedded emissions of these goods do not need to be included in the quarterly CBAM report. However, for returned goods as defined in Article 205 of the Union Customs Code, the reporting obligations are not waived. Article 205 applies to returned goods which were originally re-exported after having been placed under inward processing.
  • During the definitive period, reporting declarants will have to report returned goods as defined in Article 203 of the Union Customs Code in their annual CBAM declaration, however they must input ‘zero’ for the total embedded emissions corresponding to those goods. For returned goods as defined in Article 205 of the Union Customs Code, the declarant must report the embedded emissions like for any other import of CBAM goods.
  • The above provisions on “returned goods” only apply to goods of non-EU origin. Conversely, for goods which are of EU origin (according to the rules of origin) when they are returned to the Union, no CBAM applies…”

QUESTION N.12 Does the CBAM apply to military goods?

ANSWER N.12: “

  • As provided in Article 2(3)(c) of the CBAM Regulation, CBAM does not apply to goods to be moved or used in the context of military activities pursuant to Article 1, point (49), of Commission Delegated Regulation (EU) 2015/2446 (UCC-DA).
  • Note, however, that Article 1(49) of Commission Delegated Regulation (EU) 2015/2446 (UCC-DA) only refers to goods moved between military forces (e.g. between NATO basis) in the context of the military activities as specified in points a) and b) of the above mentioned Article. The definition provided by Article 1 (49) of the UCC-DA, therefore, does not apply to the movement of commercial goods, e.g. goods sold to EU military forces. This means that for goods produced, repaired or processed by commercial companies established in the EU and then sold to EU military forces, the CBAM Regulation applies.
  • For the cross-border movements of military goods to be moved or used in the context of the military activities as defined in Article 1(49) of the UCC-DA, the document that can be used for customs purposes is the NATO or the EU form 302 as defined by Article 1(50) and (51) of Regulation (EU) 2015/2446 (UCC-DA). When those goods are declared by means of a Form 302, it is clear that they are not subject to CBAM. If they are declared in a different way, then it is recommendable that the importer clarifies in the customs declaration that the goods are not subject to CBAM because of Article 2(3)(c) of the CBAM Regulation. Detailed information regarding the use of the NATO and EU 302 forms can be found in the TAXUD guidance document on ‘customs formalities in the EU for military goods to be moved or used in the context of military activities (use of the form 302)’.
  • Moreover, it should be noted that if goods are imported by or on behalf of the military authorities of an EU MS, but not to be moved or used in any of the activities referred to in Article 1(49) UCC-DA, then the goods cannot benefit from the exemption from CBAM.
  • For completeness of information, note that according to Article 324(1)(c) and (3) UCC-IA, goods placed under inward processing for the delivery of an aircraft that are deemed to be re-exported, a repair is within the scope of this provision. In that case, CBAM would not apply…”

QUESTION N.27: I was unable to submit the first CBAM report within the submission deadline due to technical errors. What should I do?

ANSWER N.27: “

  • If a reporting declarant is unable to submit a CBAM report within the submission deadline due to technical errors, delayed submission may be requested via the CBAM Transitional Registry.
  • The “request delayed submission (technical error)” option is available in the CBAM Transitional Period from 1 February to 31 March 2024. After the request is made, reporting declarants have 30 days to submit their CBAM report.
  • In any case, in line with the Implementing Regulation 2023/1773, reporting declarants may subsequently modify and correct their first three CBAM reports until 31 July 2024.
  • In accordance with NCAs, no penalties will be imposed on reporting declarants who have experienced difficulties in submitting their first CBAM report.
  • For more detailed information on the request delay button, you may consult the “CBAM – Request Delayed Submission Process for declarants” document published on the Commission CBAM website under the “Guidance” section.

QUESTION N.28: I failed to submit a CBAM report within the submission deadline. What will happen now?

ANSWER N.28: “

  • Non-submission of a CBAM report within the reporting period is a violation of the Implementing Regulation. If a CBAM report is not submitted, penalties can be applied.
  • If a reporting declarant fails to submit a CBAM report within the submission deadline, the NCA will make a submission request through the CBAM Transitional Registry. If the reporting declarant is not registered, the NCA will communicate with the declarant outside of the registry.
  • Alternatively, to submit a CBAM report after the deadline, declarants should contact the competent authority of the Member State where they are established. This is done via the request functionality in the CBAM Transitional Registry. If declarants are not registered, they should contact the NCA via the contacts points indicated in the “Provisional list of NCAs for the Carbon Border Adjustment Mechanism” document published on the Commission CBAM website under the “where to report” section.
  • The NCA will provide the reporting declarant with a reference number, which will allow the declarant to use the “Request delayed submission (Requested by NCA)” functionality in the CBAM Transitional Registry. The declarant will then have 30 days to submit the report.
  • For more detailed information on the request delay button, you may consult the “CBAM – Request Delayed Submission Process for declarants” document published on the Commission CBAM website under the “Guidance” section.

QUESTION.30: “I am a natural person and have purchased a CBAM good online for my personal use. I later realised that the good was imported into the EU. Do I need to comply with the CBAM reporting obligations?

ANSWER N.30: “

  • The CBAM mostly applies to basic materials and basic material goods such as steel or cement, and only to a limited number of finished products. If the total intrinsic value of the CBAM goods in the consignment does not exceed EUR 150, the de minimis exemption applies.
  • Secondly, individuals usually purchase goods from a seller established in the EU, who will import the goods through a courier. The courier would usually lodge the customs declaration in the name of the seller, who is considered the ‘reporting declarant’ for CBAM purposes. In such case, individuals will not appear anywhere in the customs declaration and the CBAM Regulation does not apply to them. Note, however, that if it results from the customs declaration that the natural person is the importer and that the customs representation through the courier is direct, the natural person is responsible for complying with the CBAM reporting obligations.

QUESTION N.44: I want to correct a CBAM report. Should I correct individual pieces of information immediately or rather collect items for correction and submit a consolidated correction report later?

ANSWER N.44:

There is no limitation with respect to how often a report can be modified within the allowed time period.

  • Since the Commission has started analysing the reports beginning of February 2024, for example to produce aggregated statistics, declarants are encouraged to update the information as soon as it is available, even if further modifications are expected afterwards.

QUESTION N.50: How can I register as a declarant and access the CBAM Transitional Registry?

ANSWER N.50:

  • When they intend to become reporting declarant for CBAM purposes, economic operators must contact the national competent authority (NCA) of the Member State where they are established. The provisional list of NCAs is published and continuously updated on the dedicated CBAM webpage of the Commission: Carbon Border Adjustment Mechanism (www.europa.eu ).
  • In each Member State, the NCA is also responsible for providing reporting declarants with access to the CBAM Transitional Registry. In some cases, a new CBAM specific account with new login credentials will be required. In other cases, existing accounts for accessing custom systems may be used. In the case of Spain, for instance, access to the CBAM Transitional Registry is granted exclusively via the customs domain. Please contact your NCA for further details on the login credentials in your case.
  • Where the reporting declarant uses a “CBAM service provider”, it is possible to request from the NCA, in UUM&DS, the creation of all user profiles (importers and “CBAM service providers”) at the same time. Once the user profiles are created in UUM&DS, the importer-employer (EO) can delegate the CBAM declarant access to the provider- employee (EMPL).

QUESTION N.56: What information should I enter in the fields “applicable reporting methodology” and “other source indication”?

ANSWER N.56:

  • In the field “Applicable reporting methodology”, reporting declarants are asked to provide additional information about the monitoring and reporting methods used. In the case where actual data for indirect and direct emission is used for determining the specific embedded emissions, for instance, declarants may specify whether the methodology was calculation-based (standard or mass balance) or measurement-based.
  • n the field “Other source indication”, declarants are required to provide additional details about the source of the emission factor. This may include providing a web link to publicly available data or other relevant sources. This may include providing a web link to publicly available data or other relevant sources.

QUESTION N.68: “Are emission factors from life-cycle assessments (LCA) / life-cycle inventory databases accepted?

ANSWER N.68:

  • No, emission factors from life-cycle assessments (LCA)/life-cycle inventory databases are not accepted for calculating embedded emissions in the CBAM report. Note, however, that until 30 June 2024, i.e. reports due until 31 July 2024, for each import of goods for which the reporting declarant does not have all the information, the reporting declarant may use other methods for determining the emissions. In this limited time, emission factors from life-cycle assessments (LCA)/life-cycle inventory database may be used. Moreover, if the embedded emissions are determined using one of the eligible monitoring and reporting methods described in Article 4(2) of Implementing Regulation (EU) 2023/1773 and that method uses emission factors from life-cycle assessments, this is also possible until the end of 2024.
  • As is explained in the guidance document for non-EU operators, section 6.2.1 and Table 6-1, the concept of embedded emissions is narrower than the scope of life-cycle assessments (LCA) and product carbon footprints (PCF). The use of emission factors from LCA databases therefore significantly over-estimate the embedded emissions. This is counter the design of the CBAM which aims at mirroring the emissions covered by the EU ETS. In the definitive phase, importers would be required to surrender too many CBAM certificates if they used these emission factors.
  • However, it cannot be excluded that the providers of LCA databases develop CBAM-compatible datasets in the future. Operators of installations producing CBAM goods would be able to use such databases, provided the database documentation provides evidence that the system boundaries underlying the database values are suitable for the CBAM, as operators are responsible for reporting correct data.

QUESTION N.91: Can we divide a steel site into more than one installation?

ANSWER N.91:

  • The division of sites into different installations is possible. The division of installations into separate production processes is even obligatory where different production routes exist within one installation.
  • Moreover, dividing installations is in particular useful for more detailed, more transparent monitoring. For example, it may be useful to consider the coke ovens and a lime production as separate installations, as they would not count to the embedded emissions of the steel produced.
  • According to the monitoring rules of Implementing Regulation (EU) 2023/1773, a division of installations should not lead to different results of the final embedded emissions of steel products, as precursors are taken fully into account by the CBAM methodology.

QUESTION N.92.What should be filled in the field “steel mill identification number” in the CBAM report?

ANSWER N.92:

  • The “steel mill identification number”, also known as “heat number”, in principle indicates the mill/furnace where the steel product came from. In case there are many different heat numbers, we suggest leaving a comment. However if there are only a few heat numbers, they can all be filled in the field.
  • Note that, while we encourage you to provide this information, the “steel mill identification number” is an optional field.

QUESTION N.99. Must goods transiting in the EU be reported under CBAM?

ANSWER N.99 “…. No. Only goods released for free circulation into the EU are subject to the CBAM, while goods transiting in the EU are not.

  • Similarly, the CBAM does not apply in respect to samples of non-EU origin (e.g. sent for testing) which are declared for temporary admission, and not released for free circulation …”

Finally it is interensting to underline that CBAM compliance requires a good management of: a) made in/non-preferential origin processes; b) customs classification process; c) intrinsic value; d) special regimes. All these points are the same of the ones required for the AEO/trust and check trader.