In the first part of the article about CBAM, we discussed the obligations that liable persons have during the transition period. In this article, we will present the final period, which begins on January 1, 2026. The transition period is primarily intended for learning and aligning all involved parties and adjusting the legislation. The final period brings additional burdens on the import of carbon-intensive goods and the control of submitted CBAM reports. After the end of the transition period, liable persons will have to purchase CBAM certificates for the import of carbon-intensive goods and submit an annual CBAM report or declaration, which will be pre-verified by an accredited verifier.

 

How Does the CBAM Mechanism Work in the Final Period?

 

The liable person will first need to apply for the status of an authorized CBAM declarant. Based on the unique CBAM account number, they will be able to access the CBAM registry.

The authorized CBAM declarant will have to purchase a sufficient quantity of CBAM certificates to match the embedded emissions of the imported goods. By May 31 of the current year, for the import of goods from the previous year, they will:

1. Submit the CBAM declaration, and
2. Transfer the appropriate number of CBAM certificates to their account in the CBAM registry.

 

Authorized CBAM Declarant (Articles 10 and 17 of Regulation 2023/956)

 

An importer based in the EU, if he import carbon-intensive goods, applies for the status of an authorized CBAM declarant. Instead of the EU-based importer, an indirect customs representative (freight forwarder) can also obtain the status if the indirect customs representative agrees.

If the importer is based in third countries, he cannot obtain the status of an authorized CBAM declarant. In this case, the status is obtained by the indirect customs representative.

An importer can obtain the status of an authorized CBAM declarant if:

• In the last five years before applying for the status, they have not been involved in serious or repeated violations related to customs, tax legislation, or their economic activity.
• He demonstrate his financial and business capability to fulfill the obligations under CBAM legislation.
• He is based in an EU country where he has applied for the status of an authorized CBAM declarant.
• He has an EORI number.

 

CBAM Registry (Article 14 of Regulation 2023/956)

 

The CBAM registry is a standardized electronic database containing information about: (1) CBAM certificates, (2) authorized CBAM declarants, and (3) operators and their facilities in third countries.

 

CBAM Certificates (Articles 21 – 24 of Regulation 2023/956)

 

The authorized CBAM declarant will continuously ensure a sufficient number of CBAM certificates in his CBAM account. The number of CBAM certificates at the end of each quarter must correspond to at least 80% of the embedded emissions in the goods that the authorized CBAM declarant has imported since the beginning of the calendar year. The European Commission will estimate the data on imported emissions based on the default values method, as actual emissions data will not yet be available at that time since reporting in the final period is foreseen only on an annual basis.

Each year by May 31, the authorized CBAM declarant will transfer the appropriate number of CBAM certificates according to the declared emissions in the CBAM declaration. The European Commission will delete the transferred CBAM certificates from the registry.

If the authorized CBAM declarant submits an insufficient number of CBAM certificates, they will be officially notified. No later than one month from the official notification, they must transfer the missing CBAM certificates. If the authorized CBAM declarant buys too many CBAM certificates, they can sell them to the European Commission based on an application submitted no later than June 30 of each year in which they transferred CBAM certificates. Certificates that are neither transferred nor sold will be canceled by the European Commission without any compensation on July 1 for certificates purchased in the previous calendar year.

The price at which authorized CBAM declarants will purchase CBAM certificates will be formed as the average of the final prices of EU ETS rights in the auction system for each calendar week. The European Commission will publish the weekly average price on its website, and it will apply from the first working day after its publication to the first working day of the following calendar week.

 

CBAM Declaration

 

The authorized CBAM declarant will submit the CBAM declaration by May 31, for the first time in 2027 for the year 2026. The CBAM declaration will replace the quarterly CBAM reports from the transition period.

The CBAM declaration will include information on:

• The total quantity of carbon-intensive goods imported in the previous calendar year,
• The total emissions of the imported goods,
• The total number of CBAM certificates,
• Copies of reports issued by accredited verifiers, with which the authorized CBAM declarant ensures that the data in the CBAM declaration are correct.

Accredited verifiers are appointed by the national accreditation body (in Slovenia, the public institution Slovenska akreditacija). Currently, Slovenia has only two accredited verifiers, namely: Bureau Veritas and the Slovenian Institute for Quality and Metrology.

 

CONCLUSION

 

The CBAM mechanism in the final period extends the existing EU ETS system to industrial polluters from third countries who want to sell their goods on the EU market. Gradually, the CBAM mechanism will also complement the existing EU ETS system. With the start of the final period, free emission allowances received by European polluters will be gradually phased out. The central goal of both mechanisms is EU climate neutrality by 2050.

 

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