EU to Start Collecting Greenhouse Emissions Data
Beginning May 10, the European Union started gathering data to assign a fee for carbon and other greenhouse gas emissions on imported goods. The so-called Carbon Border Adjustment Mechanism (CBAM) will be phased in during the next 10 years.
The CBAM is designed to ensure the carbon price for imports is equal to that of EU-produced material. Companies importing fertilizers and other goods will need to begin reporting direct and indirect emissions of their goods beginning Oct. 1. The reporting process will end Jan. 31, 2024.
After the initial reporting period, the EU will analyze the data and come up with an appropriate carbon tax. The system is designed to go into effect in January 2026. At that time, importers will declare their imports of the previous year and the estimated greenhouse gas emissions related to those imports. Carbon-tax certificates will be calculated from weekly auction prices in Euros per CO2 metric tons emitted.
Initial collection of data will include fertilizers, cement, and electricity. The plan calls for most industries to be included in the CBAM by 2030.