CBAM SERVICES

Understanding the Carbon Border Adjustment Mechanism (CBAM)

The importance of CBAM

The Carbon Border Adjustment Mechanism (CBAM) is a pivotal regulation in the European Union’s climate strategy, designed to combat carbon leakage and establish a level playing field for industries competing with countries that have less stringent carbon regulations. By levying a cost on both direct and, potentially, indirect emissions from companies importing covered goods into the EU, CBAM introduces a significant financial risk that businesses must navigate.

Who is affected by the CBAM?

The broad scope of the EU CBAM, which extends to products as fundamental as screws, nuts, and bolts, signifies that a wide array of importers will face new compliance obligations. Consequently, this creates an urgent need for these companies to manage not only compliance but also the financial risks associated with CBAM.

Critically, the CBAM levy will be based on the live EU Allowance price, exposing importers to the same carbon market pricing risks as domestic EU producers.

Cement

Iron & Steel

Aluminum

Fertilisers

Electricity

Hydrogen

How we can help you

We provide a comprehensive suite of services designed to meet your unique needs, whether you’re new to the CBAM or seeking advanced financial risk management strategies. Our approach is rooted in education, empowering you with the knowledge necessary to navigate the CBAM with confidence.

Here’s how we can support you:

Foundational insights

Begin your journey with our range of guides and resources that provide a comprehensive overview of CBAM. These insights are ideal for organisations beginning to navigate this regulation.

Structured training

Enhance your knowledge through our modular training, which efficiently covers both foundational and advanced topics on CBAM compliance and financial risk management, delivered through interactive sessions.

Strategic insights

Empower your decision-making and stay ahead of regulatory changes with our essential strategic monthly and quarterly reports, along with timely market outlook updates.

Tailored risk management

Leverage our expertise in the EU Emissions Trading System and tailored risk modelling to minimise potential financial impacts and develop prudent financial risk management strategies that help you fix CBAM costs today.

For businesses facing critical challenges posed by the CBAM, our expert consultancy services deliver customised strategies that address compliance complexities and financial risks, ensuring your organisation remains resilient and competitive in a dynamic regulatory landscape.

Ready to discuss your CBAM challenges? Connect with our team of experts to discuss your options for effective CBAM engagement.
Give us a call today on 020 3637 1055 or let us call you back.

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Understanding the financial implications of CBAM

Failure to adapt could result in substantial cost increases, impacting profitability and market competitiveness. Therefore, proactive carbon risk management strategies are essential for businesses affected by the CBAM to safeguard their operations and maintain their market position in an increasingly regulated environment.

CBAM compliance requirements and timelines

To comply with CBAM, businesses must follow strict reporting and payment schedules. During the transitional period (October 2023 – December 2025), importers must report the carbon emissions embedded in their goods, without financial obligations.

After 2026, importers will need to purchase CBAM certificates to cover these emissions. Compliance will involve regular emissions reporting and certificate purchases to avoid penalties.

CBAM certificates:
what you need to know

Starting in 2026, EU-based importers of covered goods will be required to purchase CBAM certificates. The certificate price will be based on the average price of EU Allowances (EUAs), the currency of the EU Emissions Trading System (EU ETS).

Restrictions on the use of CBAM certificates makes managing CBAM financial risks complex. Fortunately, there are risk-management solutions available to address these problems.

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How CBAM certificates work

Pricing

The price of CBAM certificates will be based on the average price of EU ETS carbon auctions held weekly. If no auctions occur in a week, the price will reflect the previous week’s average.

Non-tradable & limited validity

CBAM certificates cannot be traded and will only be valid until July 1st of each year, starting in 2027. Any unused certificates will expire after this date.

Authorised declarants

Certificates can only be sold to authorised CBAM declarants, responsible for ensuring compliance with CBAM regulations.

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With the Carbon Border Adjustment Mechanism (CBAM) introducing substantial financial risks for businesses, understanding its implications is crucial. Contact us today to help you navigate the complexities of CBAM and protect your business from significant financial exposure.

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Download our free CBAM Guide

Stay ahead with our overview guide to the CBAM, providing key insights into this important regulation. Inside, you'll discover:

A clear overview of the Carbon Border Adjustment Mechanism

How the CBAM operates and its implications

Who is affected and the potential financial risks

How our expert services can help mitigate your exposure

Get your guide now and start navigating CBAM with confidence.

Download the Guide

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