In August, Czech companies importing goods from outside the European Union were added a new obligation. For imported products, they must report the actual values of emissions produced during their manufacture. The adjustment is intended to improve the competitiveness of European companies, but many of them are bothered by the additional administrative burden.
The new carbon offset mechanism, most commonly referred to as a carbon tariff, is introduced by a Regulation of the European Parliament and of the Council. It is part of a broader package of measures to achieve climate neutrality by 2050, known as the Green Deal for Europe.
The Carbon Border Adjustment Mechanism (CBAM) itself aims to ensure that goods imported into the European Union are subject to the same carbon costs as goods produced within the Union. This is to prevent so-called "carbon leakage" - the shifting of production to countries with lower environmental standards in order to save money on emission allowances.
The carbon duty comes in several stages. While companies have so far been able to report standardised values, they will have to report actual emissions for August and the following months. Companies will thus have to obtain accurate data on emissions from their suppliers.
This is expected to be a time-consuming and administratively demanding communication. So much so that the European Commission has prepared guidance on how to communicate with suppliers and how to obtain the required data. It will pay off for companies in the long run to communicate as transparently as possible with their supply chain.
Specifically, these emissions will be for electricity, cement, aluminium, hydrogen, fertilisers, iron and steel. However, the range of goods monitored is expected to expand in the future. The carbon tariff will thus affect, for example, automotive companies and their suppliers, engineering firms that produce iron, steel or aluminium, as well as the construction sector and agriculture.
Škoda Auto is one of these companies. It became obliged to submit a carbon offset report at the end of January this year. According to a spokesperson for the carmaker, its preparation and submission to the register set up by the European Commission represent a considerable administrative burden and are very costly.
The whole process has several stages. It is necessary to identify the goods subject to CBAM reporting, obtain from the producers the GHG emissions of the production of the goods, calculate the GHG emissions corresponding to the imported goods, register in the CBAM registry, process and report to the registry.
ondrej.snejdar@bdo.cz
viktorie.nerpas@bdo.cz
The new carbon offset mechanism, most commonly referred to as a carbon tariff, is introduced by a Regulation of the European Parliament and of the Council. It is part of a broader package of measures to achieve climate neutrality by 2050, known as the Green Deal for Europe.
The Carbon Border Adjustment Mechanism (CBAM) itself aims to ensure that goods imported into the European Union are subject to the same carbon costs as goods produced within the Union. This is to prevent so-called "carbon leakage" - the shifting of production to countries with lower environmental standards in order to save money on emission allowances.
The carbon duty comes in several stages. While companies have so far been able to report standardised values, they will have to report actual emissions for August and the following months. Companies will thus have to obtain accurate data on emissions from their suppliers.
This is expected to be a time-consuming and administratively demanding communication. So much so that the European Commission has prepared guidance on how to communicate with suppliers and how to obtain the required data. It will pay off for companies in the long run to communicate as transparently as possible with their supply chain.
Specifically, these emissions will be for electricity, cement, aluminium, hydrogen, fertilisers, iron and steel. However, the range of goods monitored is expected to expand in the future. The carbon tariff will thus affect, for example, automotive companies and their suppliers, engineering firms that produce iron, steel or aluminium, as well as the construction sector and agriculture.
Škoda Auto is one of these companies. It became obliged to submit a carbon offset report at the end of January this year. According to a spokesperson for the carmaker, its preparation and submission to the register set up by the European Commission represent a considerable administrative burden and are very costly.
The whole process has several stages. It is necessary to identify the goods subject to CBAM reporting, obtain from the producers the GHG emissions of the production of the goods, calculate the GHG emissions corresponding to the imported goods, register in the CBAM registry, process and report to the registry.
ondrej.snejdar@bdo.cz
viktorie.nerpas@bdo.cz