Businesses unprepared for the new EU carbon border tax

Many businesses are unprepared for the impact of the EU’s carbon border adjustment mechanism (CBAM) and run the risk of penalties or delays to their supply chain if they are not compliant according to BDO.

The reporting obligations of the new mechanism which came into force on 1 October 2023 require EU importers to submit quarterly declarations to their customs authorities on the carbon emissions associated with certain incoming goods. This will affect UK businesses selling in the EU even if they are only exporting to EU customers.

Initially CBAM will apply only to imports into the EU of some types of aluminium cement electricity fertiliser hydrogen and iron/steel – in addition some processed goods such as nuts and bolts will have to be reported.

UK businesses supplying these goods to an EU importer (or importing into the EU...