By Regulation (EU) 2023/956 of 10 May 2023, the European Union introduced the carbon border adjustment mechanism (CBAM) as part of the "Fit for 55" legislative package.

The purpose of the mechanism is to prevent the risk of carbon leakage. Carbon leakage occurs if, due to the costs associated with climate policies, companies in certain sectors or subsectors of industry shift production to other countries with less stringent climate policies and if equivalent products with lower greenhouse gas emission intensity are substituted by imports from these countries.

CBAM should ensure that imported products are subject to a regulatory system where carbon costs equivalent to those incurred under the EU Emissions Trading Scheme (ETS) are applied, resulting in an equivalent carbon price for imported and domestic products. The mechanism should thus strengthen climate action in the EU and support the reduction of greenhouse gas emissions in third countries through the use of more emission-efficient technologies by producers.

From 2026, the mechanism will gradually become an alternative to current measures against carbon leakage. All companies importing goods from third countries into the customs territory of the European Union falling under Annex I of Regulation (EU) 2023/956 have until 31 January 2024 to submit a report to the CBAM for the period 1 October 2023 to 31 December 2023 at https://cbam.ec.europa.eu/declarant.

For more detailed information see CBAM - Q&A. The national competent authority for CBAM is the Executive Environment Agency (EEA) https://eea.government.bg/ Contact - cbam@eea.government.bg