The European Carbon Border Adjustment Mechanism (CBAM) regulations changed as of yesterday. Under the old provisions, EU importers were required to keep record and make reports but were not required to pay emissions taxes under the CBAM scheme. As of January 1, European importers will be paying taxes related to certain materials under the CBAM regulations.
The philosophy behind CBAM is that EU producers are meeting stringent emissions standards. Foreign producers may not meet the same stringent emissions standards. Importers of foreign goods pay an emissions fee to offset the fact that the foreign producer did not have the expenses associated with meeting the stringent EU emissions standards.
Most aircraft parts are NOT subject to CBAM. But there are several caveats to this statement:
- CBAM applies mostly to basic materials and basic material goods, BUT it also applies to some finished products, such as:
- Tubes and pipes (CN Headings 7303-7307, 7608-7609)
- Tanks (CN Headings 7309-7310, 7611-7612)
- Compressed gas tanks (CN Heading 7311, 7613)
- Steel or iron fasteners (CN Heading 7318)
- Aluminum wires (CN Heading 7614).
- The EU plans to periodically examine the CBAM Regulations and has reserved the right to additional goods and sectors to the coverage of CBAM.
Wondering if your article is subject to CBAM? Check out CBAM Annexes I and II: they have the lists of all of the CN codes that are currently subject to CBAM.
CBAM is connected to the European Union Emissions Trading System (EUETS). Originally, aviation was exempt from the EUETS, but it appears that aviation is now being gradually incorporated into the EUETS. Thus, aviation parts could be subject to CBAM in the future.
Discussion
No comments yet.