Industry Focus >>Trimmed for Fastener Business Owners!

CBAM Regulation, the Lightweight Version
專為扣件人！歐盟 CBAM 法案縮減版

For those who struggle with the daunting
length of CBAM regulation in full text, Fastener
World editors have gone through all 53 pagesof the regulation, and extracted the essential
parts into a brief article for fastener businessowners. This article will help you get familiar
with at least 80% of the core context of CBAM,and help you get into the swing of it.
T he ed itor s have slightl y simplif ied
abstruse statements in the Regulation andcut out repetitive and redundant words andphrases to make it easier to read. Without
further ado, here are the key CBAM excerpts.

Regulation (EU) 2023/956 of the European Parliament and of the Council (10 May 2023)
1.

‘Direct emissions’ means emissions from the production
processes of goods, including emissions from the productionof heating and cooling that is consumed during the production
processes, irrespective of the location of the production of theheating or cooling. For 7318 – screws, bolts, nuts, coach screws,
screw hooks, rivets, cotters, cotter pins, carbon dioxide washers(including spring washers) and similar articles of iron or steel,
only direct emissions are to be taken into account.

2.

‘Indirect emissions’ means emissions from the production ofelectricity which is consumed during the production processesof goods, irrespective of the location of the production of theconsumed electricity.

3.

‘Embedded emissions’ means direct emissions released during
the production of goods and indirect emissions from theproduction of electricity that is consumed during the production
processes. The authorized CBAM declarant shall keep recordsof the information required to calculate the embedded emissions
until the end of the fourth year after the year in which theCBAM declaration has been or should have been submitted.

4.

‘Actual emissions’ means the emissions calculated based on
primary data from the production processes of goods and fromthe production of electricity consumed during those processes.

5.

‘Ton of CO2e’ means one metric ton of CO2.

6.

‘CBAM certificate’ means a certificate in electronic format
corresponding to one ton of CO2e of embedded emissions ingoods.

7.

‘Surrender’ means offsetting of CBAM certificatesagainst the declared embedded emissions in imported
goods or against the embedded emissions in imported
goods that should have been declared.

8.

‘Default value’ means a value calculated or drawn
from secondary data, which represents the embedded
emissions in goods. When actual emissions cannot
be adequately determined by the authorized CBAM
declarant, default values shall be used. When reliabledata for the exporting country cannot be applied fora type of goods, the default values shall be basedon the average emission intensity of the X % worst
performing EU ETS installations for that type ofgoods.

9.

‘Carbon price’ means the monetary amount paid ina third country, under a carbon emissions reduction
scheme, in the form of a tax, levy or fee or in theform of emission allowances under a greenhouse gas
emissions trading system, calculated on greenhousegases covered by such a measure, and released during
the production of goods.

10. ‘Installation’ means a stationary technical unit where aproduction process is carried out.
11. ‘Operator’ means any person who operates or controls
an installation in a third country.
12. ‘National accreditation body’ is appointed by eachMember State.
惠達雜誌

Hardware & Fastener Components - no61/2024» Critical Definitions

101

Industry Focus >>» Obligations and Rights of Authorized CBAMDeclarants
1.

Goods shall be imported into the customs territory of the Union
only by an authorized CBAM declarant.

2.

Any importer established in a Member State shall, prior toimporting goods into the customs territory of the Union, apply forthe status of authorized CBAM declarant.

3.

Where an importer is not established in a Member State, theindirect customs representative shall submit the application for anauthorization.

4.

The application for an authorization shall include the following
information about the applicant:» Carbon Price Paid in a Third Country1.

An authorized CBAM declarant may claim in
the CBAM declaration a reduction in the numberof CBAM certificates to be surrendered in orderto take into account the carbon price paid in thecountry of origin for the declared embeddedemissions. The reduction may be claimed only if
the carbon price has been effectively paid in thecountry of origin. In such a case, any rebate or otherform of compensation available in that country thatwould have resulted in a reduction of that carbon
price shall be taken into account.

2.

The authorized CBAM declarant shall keep recordsof the documentation required to demonstrate thatthe declared embedded emissions were subject to acarbon price in the country of origin of the goods
that has been effectively paid. The authorized
CBAM declarant shall in particular keep evidence
related to any rebate or other form of compensation
available, in par ticular the references to therelevant legislation of that country. The information
contained in that documentation shall be certified
by a person that is independent from the authorized
CBAM declarant and from the authorities of
the country of origin. The name and contact
information of that independent person shall appear
on the documentation. The authorized CBAM
declarant shall also keep evidence of the actual
payment of the carbon price until the end of thefourth year after the year during which the CBAM
declaration has been or should have been submitted.

(a) Name, address and contact information(b) EORI number(c) Main economic activity carried out in the Union(d) Certification by the tax authority in the Member State where
the applicant is established that the applicant is not subject toan outstanding recovery order for national tax debts(e) Declaration that the applicant was not involved in any
serious infringements or repeated infringements of customs
legislation, taxation rules or market abuse rules during thefive years preceding the year of the application, including thatit has no record of serious criminal offences relating to its
economic activity(f) Information necessary to demonstrate the applicant’s financial
and operational capacity to fulfil its obligations(g) Estimated monetary value and volume of imports of goods
into the customs territory of the Union by type of goods, forthe calendar year during which the application is submitted,
and for the following calendar year(h) Names and contact information of the persons on behalf ofwhom the applicant is acting, if applicable5.

» Registration of Operators and ofInstallations in Third Countries
1.

The applicant may withdraw its application at any time.

(a) the name, address and contact information of theoperator

Hardware & Fastener Components - no.61/2024» CBAM Declaration

102

1.

By 31 May of each year, and for the first time in 2027, eachauthorized CBAM declarant shall use the CBAM registry tosubmit a CBAM declaration for the preceding calendar year.

2.

The CBAM declaration shall contain the following information:(a) Total quantity of each type of goods imported during thepreceding calendar year, expressed in megawatt-hours forelectricity and in tons for other goods(b) Total embedded emissions in the goods, expressed in tons ofCO2e emissions per megawatt-hour of electricity or, for othergoods, in tons of CO2e emissions per ton of each type ofgoods(c) Total number of CBAM certificates to be surrendered(d) Copies of verification reports, issued by accredited verifiers

惠達雜誌The request for registration shall contain thefollowing information to be included in the CBAM
registry upon registration:(b) the location of each installation including thecomplete address and geographical coordinates
expressed in longitude and latitude, including six
decimals(c) the main economic activity of the installation
2.

The Commission shall notify the operator of theregistration in the CBAM registry. The registration
shall be valid for a period of five years from the dateof its notification to the operator of the installation.

3.

The operator may, at any time, ask to be deregisteredfrom the CBAM registry. The Commission shall,
upon such request, and after notifying the competentauthorities, deregister the operator and delete theinformation on that operator and on its installationfrom the CBAM registry.

Industry Focus >>1.

2.

All information acquired by the competent authority orthe Commission in the course of performing their duties
which is by its nature confidential or which is provided ona confidential basis shall be covered by the obligation of
professional secrecy. Such information shall not be disclosedby the competent authority or the Commission without theexpress prior permission of the person or authority thatprovided it or by virtue of Union or national law.
By way of derogation from paragraph 1, the competentauthorities and the Commission may share such information
with each other, the customs authorities, the authorities
in charge of administrative or criminal penalties, and theEuropean Public Prosecutor’s Office, for the purposes ofensuring compliance of persons with their obligations under
this Regulation and the application of customs legislation.
Such shared information shall be covered by professionalsecrecy and shall not be disclosed to any other person orauthority except by virtue of Union or national law.

» Accreditation of Verifiers
1.

» Price of CBAM Certificates
1.

The Commission shall calculate the price of CBAM
certificates as the average of the closing prices of EU
ETS allowances on the auction platform, in accordancewith the procedures, for each calendar week. For thosecalendar weeks in which no auctions are scheduled on
the auction platform, the price of CBAM certificatesshall be the average of the closing prices of EU ETS
allowances of the last week in which auctions on theauction platform took place.

2.

The Commission shall publish the average price on its
website or in any other appropriate manner on the firstworking day of the following calendar week. That priceshall apply from the first working day following that ofits publication to the first working day of the following
calendar week.

» Surrender of CBAM Certificates1.

By 31 May of each year, and for the first time in 2027
for the year 2026, the authorized CBAM declarant shallsurrender via the CBAM registry a number of CBAMcertificates that corresponds to the embedded emissions
declared for the calendar year preceding the surrender.
The authorized CBAM declarant shall ensure that therequired number of CBAM certificates is available on
its account in the CBAM registry.

2.

The authorized CBAM declarant shall ensure that thenumber of CBAM certificates on its account in theCBAM registry at the end of each quarter correspondsto at least 80% of the embedded emissions in all goods it
has imported since the beginning of the calendar year.

A national accreditation body may, on request, accredit a
person to be a verifier for the purpose of this Regulation.

» Review of CBAM Declarations
1.

2.

3.

The Commission may review CBAM declarations, inaccordance with a review strategy, including risk factors,
within the period ending with the fourth year after the year
during which the CBAM declarations should have beensubmitted.
Where the competent authority concludes that the declarednumber of CBAM certificates to be surrendered is incorrect,
it shall determine the number of CBAM certificates whichshould have been surrendered by the authorized CBAMdeclarant, taking into account the information submitted bythe Commission. The competent authority shall notify theauthorized CBAM declarant of its decision on the numberof CBAM certificates determined and shall request that theauthorized CBAM declarant surrender the additional CBAM
certificates within one month.

» Repurchase of CBAM Certificates
1.

Where an authorized CBAM declarant so requests, theMember State where that authorized CBAM declarant
is established shall repurchase the excess CBAM
certificates remaining on the account of the declarant
in the CBAM registry after the certificates havebeen surrendered. The Commission shall repurchasethe excess CBAM certificates through the common
central platform on behalf of the Member State where
the authorized CBAM declarant is established. The
authorized CBAM declarant shall submit the repurchaserequest by 30 June of each year during which CBAM
certificates were surrendered.

2.

The number of certificates subject to repurchase shallbe limited to one third of the total number of CBAM
certif icates purchased by the authorized CBAM
declarant during the previous calendar year.

3.

The repurchase price for each CBAM certificate shallbe the price paid by the authorized CBAM declarant forthat certificate at the time of purchase.

Where the competent authority concludes that the numberof CBAM certificates surrendered exceeds the number
which should have been surrendered, it shall informthe Commission without delay. The CBAM certificatessurrendered in excess shall be repurchased.

» Sale of CBAM Certificates
1.

A Member State shall sell CBAM certificates on a common
central platform to authorized CBAM declarants establishedin that Member State.

2.

The Commission shall ensure that each CBAM certificate
is assigned a unique identification number upon its creation.
The Commission shall register the unique identification
number and the price and date of sale of the CBAM
certificate in the CBAM registry in the account of theauthorized CBAM declarant purchasing that certificate.

惠達雜誌

Hardware & Fastener Components - no61/2024» Professional Secrecy and Disclosure ofInformation

103

Industry Focus >>» Rules Applicable to the Importation of Goods
1.

The customs authorities shall not allow the importation of goods by any person
other than an authorized CBAM declarant.

2.

The customs authorities may communicate confidential information acquired by
the customs authorities in the course of performing their duties, or provided to thecustoms authorities on a confidential basis, to the Commission and the competentauthority of the Member State that has granted the status of the authorized CBAMdeclarant.

2.

» Penalties
1.

An authorized CBAM declarant who fails to surrender, by 31 May of each year, thenumber of CBAM certificates that corresponds to the emissions embedded in goods
imported during the preceding calendar year shall be held liable for the payment ofa penalty. Such a penalty shall be applicable in the year of importation of the goods.

Where a person other than ana ut hor i z e d C BA M de cla r a nt
introduces goods into the customs
territory of the Union withoutcomplying with the obligations
under this Regulation, that person
shall be held liable for the paymentof a penalty. Such a penalty shallbe an amount from three to fivetimes the penalty referred to in
pa ragraph 1. T he payment of
the penalty shall not release theauthorized CBAM declarant fromthe obligation to surrender theoutstanding number of CBAM
certificates in a given year.

» Circumvention
1.

Practices of circumvention shall bedefined as a change in the patternof trade in goods, which stems
from a practice, process or work
which may consist of, but is not
limited to:(a) Slightly modifying the goods
concerned to make those goods
fall under CN codes which
are not listed, except where
the modification alters theiressential characteristics(b) Artificially splitting shipments
into consignments the intrinsic
value of which does not exceed
the threshold» Scope of the Transitional
PeriodHardware & Fastener Components - no.61/2024

During the transitional period from
1 October 2023 until 31 December 2025,
where the importer is established in a
Member State and appoints an indirect
customs representative, and where theindirect customs representative so agrees,
the reporting obligations shall apply to suchindirect customs representative. Where theimporter is not established in a Member
State, the reporting obligations shall applyto the indirect customs representative.

That’s a Wrap
There you go. Fastener World keeps
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check out www.fastener-world.com and ourpublications.

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Article by Dean Tseng104惠達雜誌