EU regulation on the carbon border adjustment mechanism (CBAM)

CBAM is the EU’s new carbon border adjustment system. It ensures that imported goods are subject to the same carbon costs as goods produced within the EU.

Companies importing certain goods from non-EU countries will be required to report emissions data in the future. In addition, CBAM certificates will be required from 2026 onwards. The objective is to create fair competition and prevent carbon-intensive production from being relocated to countries with lower environmental standards.

Goods originating in the EU as well as in Norway, Iceland, Liechtenstein and Switzerland are not subject to the CBAM regulation, as these countries operate emissions trading systems equivalent to that of the EU.

Accordingly, goods covered by the regulation (including cement, fertilisers, iron, steel, aluminium, hydrogen and electricity) as well as products manufactured from these materials may only be released for free circulation by an authorised CBAM declarant. If the importer is not established in an EU Member State, the indirect customs representative must hold the status of an authorised CBAM declarant.

Until now, it was generally understood that CBAM-related goods below a threshold of 50 tonnes per calendar year did not require CBAM authorisation.

Recently, German customs authorities have begun rejecting imports of CBAM-related goods under the Incoterm “DDP” where no EU-established authorised CBAM declarant is involved. Even if shipments below 50 tonnes per calendar year are generally exempt from CBAM authorisation requirements, imports into the EU may still require an EU-established indirect representative with the appropriate authorisation.

Furthermore, it must be ensured that valid documentation is available confirming whether the goods are subject to CBAM requirements.

Until a common solution has been reached, Swiss companies using DDP deliveries without an EU establishment are currently unable to fulfil their CBAM obligations independently.

We therefore currently recommend that Swiss exporting companies avoid agreeing on DDP Incoterms. In addition, the indication of the non-preferential origin in accordance with Article 59 of the Union Customs Code (Regulation (EU) No. 952/2013) is essential for goods affected by CBAM.