CO2 Border Adjustment: Business urgently calls for amendments

CO₂ Border Adjustment Mechanism (CBAM) burdens German companies: In their May 2024 position, the Association of German Chambers of Commerce and Industry (DIHK) and the Federation of German Industries (BDI) urgently demand improvements in reporting obligations, reducing bureaucracy, and targeted support for small and medium-sized enterprises.

Since October 2023, the CBAM has become a reality: Importing companies are required to provide detailed reports on the amount of CO₂ emitted during the production of their products. In their joint paper from May 2024, the German Chamber of Commerce and Industry (DIHK) and the Federation of German Industries (BDI) analyze the impact of the new EU regulations on German companies and highlight that unclear reporting requirements and high bureaucracy especially burden small and medium-sized enterprises.

The "Carbon Border Adjustment Mechanism" obliges importers of certain emission-intensive products to report how many goods with what carbon content they introduce into Germany. However, the rushed and bureaucratic implementation of CO₂ reporting obligations overwhelms many companies, especially small and medium-sized enterprises. Thus, CBAM also applies to imports of "common goods" such as screws starting at €150.

Strategic questions arise concerning the non-covered export side and looming trade conflicts, which weaken Germany's competitiveness.

Unclear and inappropriate reporting obligations

"CBAM does address the problem of CO₂ relocation in certain economic sectors, but leads to unclear and inappropriate reporting obligations," states DIHK foreign trade chief Volker Treier. The Border Adjustment Mechanism burdens the competitiveness of German export industries in global markets: "It puts our companies' complex supply chains under pressure," warns Treier. "The EU must therefore work quickly and with priority on international convergence in climate protection."

Given legal uncertainties, especially in highly complex calculation and verification methods, urgent improvements are needed – such as higher exemption thresholds or prolonged use of standard values. BDI and DIHK demand such changes in a joint position paper. Under the headline "Implementation of the CO₂ Border Adjustment Mechanism – Bureaucracy and challenges for German industry," the associations address the pressing questions regarding CBAM and introduce solutions.

Better information, support for smaller companies

The EU Commission, according to BDI and DIHK, should immediately strengthen its information exchange and create a self-assessment instrument to support smaller and medium-sized companies in implementing CBAM.

"For the German economy, in times of high energy prices and competitive pressures, it is more important than ever that European climate protection ambitions do not become an international competitive disadvantage," calls Treier. Especially for energy-intensive sectors, a global level playing field is crucial.