The objective of the CBAM is to encourage producers in third countries to seek processes and solutions to reduce emissions when manufacturing CBAM goods. The CBAM is therefore intended to use actual emissions. However, experience during the CBAM transitional period has shown that many importers have been unable to obtain actual emissions from their suppliers. The European Commission has therefore decided to offer importers a choice: calculating emissions on the basis of actual emissions or default values.
Calculation of emissions based on Default Values
The calculation of emissions based on default data relies on publicly available data on direct and indirect emissions for individual CBAM goods. The value depends on the type of goods (8-digit CN code), the country in which the goods were produced, the mark-up and the production route. The currently applicable default values are available at the following link: https://taxation-customs.ec.europa.eu/document/download/1c05d211-80cb-4aaa-8ef0-e08005a95d7e_en?filename=DV%20correcting%20act_final%20update_06.08.xlsx
Calculation of emissions based on Actual Values
The calculation of emissions based on actual values relies on data provided by the producer in a third country. If the producer in a third country uses the CBAM Registry, the importer can find this data in the CBAM Registry. If the producer in a third country does not use the CBAM Registry, the importer receives the emissions data directly from its supplier. In addition to the emissions data, the importer must also have a certificate issued by an accredited verifier. If the importer does not have the emissions data or the certificate issued by an accredited verifier, it must use default values to calculate the emissions.
Actual emissions are usually better for Importers
For importers, calculating emissions on the basis of default values usually results in higher CBAM obligations. It is therefore advisable for importers to verify, before purchasing CBAM goods, whether the supplier will be able to provide the data and certificate for actual emissions. This will make it easier for the importer to estimate the total cost of importing CBAM goods and optimise its procurement flows accordingly.
Prepared by: Mojca Müller, Certified tax expert at SIR
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