New obligations for persons importing goods from non-EU countries

Regulation (EU) 2023/956 establishing a border carbon adjustment mechanism (BCAM), which aims to prevent the risk of carbon leakage by charging imports of certain goods, applies from 1 October 2023.

Carbon leakage occurs if, due to the costs associated with climate policies, companies shift production to countries or if equivalent products characterised by lower GHG emission intensity are imported.

he competent authority for ICVEG in Bulgaria, the Executive Environment Agency , will monitor compliance with the Regulation and cooperate with the importers.

Who are the obliged persons and what action should they take now?

All persons importing goods covered by Annex 1 of the Regulation from third countries into the customs territory of the EU are covered by the MCVEG.

These goods are:

Steel;
Iron;
Fertilizers;
Aluminum;
Electricity;
Hydrogen;
Cement.

It is very important to note that the Annex covers multiple processed products, e.g. vessels, pipes, drums, tanks, etc., and not only the raw product.

We are currently in a transition period (until 01.01.2026) during which importers have to report on a quarterly basis the carbon emissions embedded in these products, but no financial obligations arise during this period.

The first period for such reporting was 01.10.2023 - 31.12.2023 and the window for submission was 31 March 2024.

From 1 April 2024, the European Commission should provide the EEA with information on importers who were obliged to submit a report to the ICVEG for the period 1 October 2023 - 31 December 2023 but did not do so voluntarily. In this case, the EEA should contact the importers and issue them with a "deferred submission" reference number, where penalties are possible.

There is also an obligation for contributors to submit a report for the period 1 January 2024 to 31 March 2024 by 30 April 2024, and due to the transition period, the first three ICVEG reports may be subsequently corrected by 31 July 2024.

How does the reporting happen in practice?

Reporting is done through the ICVEG Registry. Access to the register is requested through the EEA, and the following information is provided to the EEA email address:

EORI number;
You are a legal or natural person;
Name of the entity/FL;
Economic operators or customs agent you are;
Email address you are registered with EU Login.

The content of the report and, consequently, the calculation of the amounts due is regulated in the Regulation.

The KGK team has extensive experience in the field of European regulations and is ready to assist you if you need advice on the subject matter covered in this article.