BlogCarbon Border Adjustment Mechanism (CBAM)

All national CBAM authorities appointed

Written by

Ulf Narloch

Published on

With the appointment of Deutsche Emissionshandelsstelle shortly before the end of the year, all competent authorities are now in place. They play an important role in the implementation of the EU’s carbon border adjustment at national level. Right now, they are responsible for granting access to the CBAM transitional registry.

Deutsche Emissionshandelsstelle as CBAM authority

As announced on the website of Deutsche Emissionshandelsstelle (DEHSt) the German Emissions Trading Authority takes over new tasks as national competent authority for the EU Carbon Border Adjustment Mechanism (CBAM).

DEHSt is already in charge of the implementation in Germany of the European Emissions Trading System (EU ETS) for installations in energy and energy-intensive industries and the national Emissions Tradingy System (nEHS) for fuels in buildings and transport.

Consequently, the implementation of all key instruments of Germany’s carbon pricing is now in one hand. The appointment of DEHSt has been on the cards for some time, even though Germany only became the last EU member state to officially announce its CBAM authority at the end of the year.

Germany is following the example of other EU countries, which have also entrusted their ETS authorities with the new CBAM task. In total, CBAM responsibility lies with energy or environment departments in 20 countries; in 7 countries, it is with departments responsible for financial and tax issues. 

CBAM will introduce a CO2-based levy on EU imports of iron & steel, aluminium, cement, fertilizers, electricity and hydrogen from 2026, thus affecting large parts of industry.

With the start of the transitional phase in October 2023, there are extensive reporting obligations for importing companies as reporting CBAM declarants in place. Until recently, some elements of the CBAM reporting system have still been in the making by authorities at EU and national level.

Role of competent authorities

The competent authorities at national level play an important role in the implementation of CBAM obligations by companies established in the country.

Definitive period

According to the overarching regulation for establishing CBAM, the tasks of the competent authorities for the definitive period from 2026 include:

  1. Examination of applications and authorization of companies as CBAM declarants (Article 17) and registration of authorized CBAM declarants in the CBAM registry (Article 5)
  2. Review of CBAM declarations and determination of CBAM certificates to be surrendered (Article 19) and notification if available CBAM certificates are insufficient (Article 22)
  3. Imposing and enforcing sanctions in the event of infringements by authorized declarants (Article 26)

The specific rules for carrying out these tasks are to be detailed in implementing regulations to be adopted by the EU.

Transitional period

According to the implementing regulation on the reporting obligations in the transitional period until the end of 2025, the competent authorities are responsible, among other things, for:

  1. Granting authorization of reporting declarants to access the CBAM transitional registry (Article 21)
  2. Examining requests to modify or correct CBAM reports beyond the generally applicable deadlines (Article 9)
  3. Review of CBAM reports after initial screening by the EU Commission and initiation of a correction procedure in case of incomplete, incorrect or non-existent CBAM reports (Article 14)
  4. Determination and enforcement of sanctions if measures to correct a CBAM report are not sufficient (Article 16)

Determination of sanctions

The practice of competent authorities in imposing sanctions during the transitional period will be closely watched. Article 16 of the CBAM Implementing Regulation has yet to be transposed into national law, where necessary.

Generally, national CBAM authorities can impose penalties of between EUR 10 and 50 per tonne of unreported emissions on reporting declarants in the event of:

  1. Failure to take the necessary measures to fulfill the obligation to submit a CBAM report
  2. Incomplete and inaccurate CBAM reports that are not corrected even after a correction procedure has been initiated

Penalties of more than 50 euros per ton of unreported emissions can be imposed for

  1. Failure to submit reports for more than six months
  2. Submitting incomplete or inaccurate reports twice in succession

When determining the penalty level, specific circumstances should be taken into account, which are at the discretion of the competent authority.  These include the extent of the unreported information, the quantities of the unreported goods, e intentional or negligent behavior and/or the level of cooperation of the declarant.

Granting access to the CBAM registry

Right now, the competent authorities are also responsible for granting authorization of CBAM reporting declarants for access to the CBAM transitional registry. So far, at least in Germany, they have not had access, as the administration of access rights lies with the national CBAM authorities.

The CBAM transitional registry is an electronic system to record the quarterly CBAM data and to submit the CBAM reports. As data capturing for the fourth quarter of 2023 should be possible from January 1 and as comprehensive data needs to be submitted for the first report January 31, urgency is required here.

The DEHSt National Service Desk responsible for granting authorization of reporting declarants still appears to be in the process of being set up. At least the DEHSt website indicates that no individual inquiries can be answered at the moment. Registration for the DEHSt CBAM newsletter is recommended here.

Sources and further information:

Photo  Joshua Fuller on Unsplash