In a time of increasing ESG requirements for compliance with international principles of environmental protection, social responsibility and corporate governance (ESG = Environmental, Social, Governance), companies are faced with various demands from shareholders, investors, consumers, suppliers, customers, banks: all are aimed at low-carbon production.

The EU is introducing a cross-border tax on the import of carbon-intensive products from non-EU countries. This will create an obligation for EU importers to report the CO2 emissions contained in their products. This starts from October 2023, while the payment of the mentioned fee starts from January 2026. Any company that manufactures or exports products may have an additional burden to report to its customers in the EU essential data on CO2 emissions embedded in the products: this will start from October 2023. This is important because it will have a financial impact on the business of CO2 emitting companies in production process.

The EU has been working for some time now on a series of measures aimed at achieving a reduction in greenhouse gas (GHG) emissions by at least 55% by 2030. The next goal of the EU is to reach climate neutrality by 2050. On the scene is the Agreement on the Carbon Border Adjustment Mechanism (CBAM). The aim of CBAM is to prevent the risk of "carbon leakage", because it happens that parts of the industry with strong emissions of harmful gases move production to countries with less demanding environmental laws. Thus, the EU wants to reduce global carbon emissions and to encourage the reduction of emissions in third countries. The CBAM will actually be a cross-border tax on imports of high-carbon-intensive products from non-EU countries.

This is important because all producers with products within the framework of the current regulation and exporting them to the EU must first calculate their GHG emissions, and importers in the EU will have the obligation to attach these emissions data to the reports that will be submitted to the authorities for CBAM. CBAM applies to iron and steel, aluminum, chemicals, cement, electricity and fertilizers. The products must be identified with the valid customs nomenclature. During the transition period, the list of products can be expanded, e.g. to organic chemicals and polymers. It is expected that the regulation will be extended to cover all products that pose a risk of carbon leakage.

The transition period starts on October 1, 2023: only the reporting of direct emissions of greenhouse gases (GHG) contained in the product (direct emissions) is mandatory: during the transition period there are no fees or charges.

From January 1, 2026, importers will be obliged to report the quantities of products from the previous year, as well as all GHG emissions, every year (the deadline is May 31). In addition, it will be mandatory to submit the appropriate CBAM certificate number. The price of the certificate will be calculated depending on the average weekly auction price of EU ETS permits expressed in EUR/ton of emitted CO2 (about 100 EUR per 1 ton).

From 2026, more products will be added to the list until 2030. The goal is to exceed 50% of emissions from sectors covered by the EU ETS.

It would be good if domestic Serbia companies that produce carbon-intensive products and export to the EU start determining whether specific products fall under the CBAM regulation; to organize themselves around the calculation of GHG and reassess whether they comply with the requirements of this regulation; to start introducing regular procedures for collecting and monitoring GHG data; to map the generators of GHG emissions, and start the program of optimization and emission reduction through a pre-prepared decarbonization plan; to internally introduce reporting and monitor the progress of reducing their GHG emissions, with the overall goal of more readily meeting the changes introduced by the EU in this area.