Implementing the EU Carbon Border Adjustment Mechanism (CBAM)

POSITION | EXTERNAL ECONOMIC POLICY | ENERGY AND CLIMATE

Implementing the EU Carbon Border Adjustment Mechanism (CBAM) Bureaucracy and Challenges for German Business

June 2024 Key Recommendations ▪

Use of third country-specific default values beyond the summer of 2024;

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Remove persistent IT errors from the CBAM transitional registry;

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Simplify reporting and extend reporting periods;

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Raise the de minimis-threshold;

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Introduce EU CBAM Self-Assessment Tool;

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Launch large information outreach for companies and third countries with documents also in German and other important languages;

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Correct CBAM to ensure that exports from EU manufacturers are not disadvantaged along the value chain;

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Avoid disruptions in complex supply chains - the increased import of processed goods that are not CBAM-relevant or the relocation of production to non-EU countries would be exactly the opposite of what CBAM is intended to achieve;

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Use CBAM review in 2025 to engage in a close dialog with industry on strategic issues such as ensuring sufficient carbon leakage protection, CBAM expansion, CBAM impact on value chains and exports, the Climate Club and the phasing out of free allocations.

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Implementing the EU Carbon Border Adjustment Mechanism (CBAM)

Published on Jun 26, 2024

Bundesverband der Deutschen Industrie e.V.

The transition phase of the carbon border adjustment mechanism (CBAM) began in October 2023. The first few months have clearly shown that improvements are urgently needed, for example in the form of a higher de minimis threshold and the longer applicability of default values. The EU Commission must quickly strengthen its information outreach and create a CBAM self-assessment tool to support small and medium-sized enterprises in particular. It is important for the German business community to avoid international competitive disadvantages. Although the CBAM is an attempt to tackle carbon leakage in certain economic sectors, the mechanism leads to unclear and disproportionate reporting obligations, burdens the competitiveness of the export industry on global markets and puts pressure on complex supply chains.