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Preparing for the Carbon Border Adjustment Mechanism

The CBAM in the Life Sciences and Healthcare (LSHC) industry

The CBAM regulations impact Life Sciences and Health care companies significantly as the most common metal used in the manufacturing of medical equipment, stainless steel, is key to the health care sector, while aluminum foil is used in the blister packaging for medicines. Find out more what this means for your organization.

Download the PDF: Preparing for the Carbon Border Adjustment Mechanism
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What is CBAM?
 

The Carbon Border Adjustment Mechanism (CBAM) is part of the European Union's (EU) “Fit for 55 Package”, which aims to reduce net greenhouse gas emissions by at least 55% by 2030. CBAM is an environmental policy tool designed to ensure that imported products bear the same carbon costs as those incurred by operations within the EU, addressing the risk of carbon leakage. Importers of certain goods must purchase CBAM certificates reflecting the embedded emissions of their products. Certificate prices will align with the EU Emission Trading System (EU ETS) allowance prices. The Monitoring, Reporting, and Verification (MRV) rules will also match the EU ETS's system, ensuring consistent carbon pricing for all goods. Regulation (EU) 2023/956i specifies the CBAM reporting requirements during the transition period from 1 October 2023 to 31 December 2025. EU importers (or their indirect customs representatives) must report on imported goods, including quantity, direct and indirect emissions, and associated carbon costs. The first report, covering imports from October to December 2023, was due by 31 January 2024, with subsequent reports due quarterly. This phase aims to refine the methodology for calculating embedded emissions.

Is CBAM relevant to your operations?
 

From 1 January 2026, importers must purchase CBAM certificates for each imported good, with the obligation expanding until 2034. CBAM applies to Maintenance, Repair, and Operations (MRO) activities, cement, steel, aluminum, fertilizers, electricity, and hydrogen.

During the transition period (1 October 2023 to 31 December 2025), EU importers of products subject to CBAM will need to report a given set of information on a quarterly basis.

Based on the default value determined by the EU Commission for the steel sector, the categories of goods mentioned above have, on average, more than two tons of CO2e per ton of steel products. In this context, EU importers of CBAM products relevant to the health care industry can take into account an extra cost of €150 to €200 for each ton of imported steel products, and at least €1,000 for aluminum products.

The first step should be to undertake an analysis to identify whether products in your overall chain of supply and imported into the EU market are relevant for the CBAM. Read the full article for the nuances for EU importers and for manufacturers and/or suppliers of CBAM products to the EU market.

Get in touch
 

Dries Bertrand
Partner
Deloitte Belgium
Tel: + 32 2 600 66 76
Mobile: +32 479 90 31 25
Email: dbertrand@deloitte.com

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