On 17 May 2023, the European Commission introduced the Carbon Border Adjustment Mechanism (CBAM) regulation in their endeavor to address climate change and decrease the carbon footprint. This mechanism, now effective in the European Union (EU), is likely to affect businesses importing goods into the EU, including those in the Middle East (ME).
There is a transitional period for the CBAM, with an initial deadline set for 1 October 2023. Since its inception, several significant developments related to CBAM have taken place:
- 17 August 2023: The European Commission adopted rules governing the implementation of the CBAM during its transition phase.
- 1 October 2023 to 31 December 2025: A transition period will be in place. During this time, businesses are required to report on carbon emissions quarterly.
- From 1 January 2026 onward: Obligations for registration, payment, and purchasing of CBAM certificates will take effect.
Given the upcoming compliance requirements, the Deloitte Middle East Customs and Global Trade team held a 60-minute webinar on Tuesday, 12 September 2023, at 11:00 am (UAE time). This session provided insight into the CBAM regulations and the ensuing compliance requirements. The webinar covered several topics, including:
- Understanding the context of the CBAM policy.
- Mechanisms for reporting and monitoring carbon emissions.
- Methods to quantify your carbon footprint.
- Strategies for navigating the implications of CBAM and its impact on Middle Eastern businesses.
