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18 January 20245 minute read

Carbon Border Adjustment Mechanism

EC publishes default values and Germany designates authority

With the deadline for the submission of the first CBAM report on 31 January 2024 approaching, some remaining uncertainties have recently been resolved. On 22 December 2023, the European Commission (EU Commission) published default values for the determination of embedded emissions in imported goods with the exception of electricity in the transition period up to and including December 2025. Germany, as the last member state of the European Union (EU), has now also designated its competent authority for CBAM on 29 December 2023 with the German Emissions Trading Authority (Deutsche Emissionshandelsstelle).


Key Takeaways

The CBAM report must be submitted for the first time for the fourth quarter of 2023 and must be submitted no later than one month after the end of the quarter, ie no later than 31 January 2024. It is necessary for the companies concerned to deal with CBAM now at the latest and to set up appropriate compliance mechanisms in order to meet the CBAM reporting obligations.

In particular, the standard values that have now been published provide more legal certainty for the companies concerned. The German Emissions Trading Authority and the German customs authorities are also available to answer any questions. The companies affected should use the transition phase to prepare for the end of the transition phase from 1 January 2026. Important next steps include applying for access to the CBAM transitional register via the German Emissions Trading Authority and submitting the first CBAM report.

For more information on this topic, please also read our previous publication regarding CBAM.



The European Union Regulation 2023/956 establishing the Carbon Border Adjustment Mechanism entered into force on 17 May 2023. This new EU law aims to prevent carbon leakage. Companies operating in carbon intensive industries are to be dissuaded from moving their operations outside the EU where there are less stringent climate laws.

It seeks to put a fair price on the carbon emitted during the production of carbon intensive goods imported into the EU from third countries, and to encourage cleaner production in non-EU countries.

These requirements will be introduced gradually – the immediate concern is the reporting of imports in the fourth quarter of 2023 – with the first report on quantity and emissions from those goods needing to be made in January 2024.

Further requirements will apply from 2026 – including the need to apply to be an authorised CBAM declarant and the need to buy CBAM certificates. From 1 January 2026, only "authorised CBAM declarants" may import the goods listed in Annex I of the Regulation. Declarants must also purchase so-called CBAM certificates for the tonnes of CO₂ equivalents contained in the imported goods. The price for the CO₂ certificates will be based on the CO₂ price paid by manufacturing companies in the EU as part of emissions trading (weekly average of certificate prices on the European Union Emissions Trading System – EU ETS).


Recently published benchmarks in the CBAM report

During the transitional period, the EU Commission is allowing certain information in the CBAM reports to be based on estimates. These estimates  are to be based on standard values published by the EU Commission on 22 December 2023.

Until the end of 2024, the companies concerned can choose whether they

  • report completely according to the new EU methodology,
  • on the basis of an equivalent method (three options) and
  • report on the basis of the default values now published (only until July 2024, ie for Q4/23, Q1/24 and Q2/24).

From 1 January 2025, reporting can only be based on the EU methodology.


Use of default values

In order to simplify compliance in connection with CBAM, companies may use estimates when preparing CBAM reports during the transition phase.

The default values may be used to determine emissions until 30 June 2024, ie in the first three quarterly reports. During this period, the information may be based 100% on the standard values. There is no quantitative limit.

From 1 July 2024 and up to and including 31 December 2025, a quantitative limit will apply. Default values as estimations may only be used for information on complex goods with a maximum share of 20% of total embedded emissions.

Information on embedded emissions may be based 100% on estimates until 30 June 2023, i.e. for the first three quarterly reports.


Standard values defined by the EU Commission

The default values for the respective product must be determined on the basis of the number in the Combined Nomenclature. A distinction is made between direct and indirect emissions. The default values provided by the Commission are to be regularly revised by the Commission in order to incorporate the latest data provided by the companies.


Competent authority in Germany

Germany is now the last Member State to appoint its competent authority for CBAM at the end of 2023. This task will be assumed by the German Emissions Trading Authority, which is based at the Federal Environment Agency. A service desk will soon be set up there to support companies with individual questions. The German Emissions Trading Authority will also provide regular information on new CBAM developments via a newsletter.

The German Emissions Trading Authority will become the central point of contact for CBAM matters in Germany. All national competent authorities must set up a CBAM helpdesk, and be involved in the correction procedures if the EU Commission believes that a CBAM report is incomplete or incorrect. In this context, the national competent authority can also impose sanctions.

The activities of the national customs administrations, which inform the EU Commission of all CBAM-relevant imports, must be distinguished from this.

Finally, the EU Commission itself plays a central role in the implementation of CBAM by providing the necessary IT infrastructure and monitoring the CBAM reports.


DLA Piper's tax law team will be happy to answer any further questions you may have in this context.