Regulation (EU) 2023/956 of the European Parliament and of the European Council establishing a Carbon Border Adjustment Mechanism dated 10 May 2023 (hereinafter "MACF") To been published in the Journal oofficial of the European Union on 16 May 2023 (1). The regulation thus adopted entered into force on the day following its publication, i.e. May 17, 2023 (art. 36 of the regulation).
This regulation was adopted in accordance with Articles 191 and 192 of the TFEU establishing the basic principles of the European Union's environmental protection policy.
In addition, the European Commission has been granted, in accordance with Article 290 of the TFEU, the power to adopt delegated acts in order to supplement and modify certain elements considered as "non-essential" of the MACF regulation (2) . This power to adopt delegated acts was granted to the Commission for a period of five years from 17 May 2023 (Art. 28 §2 of the Regulation).
The regulation also specifies that the Commission must, before adopting a delegated act, consult experts designated by each Member State.
1. Application of the rules over time
The MACF regulation will be applicable from October 1, 2023.
However, the date of application of the various measures of the regulation varies over time (art. 36 §2 of the regulation).
Indeed, the following articles will be applicable according to their own schedule:
– articles 5, 10, 14, 16 and 17 will apply from 31 December 2024;
– Articles 2 § 2; 4; 6 to 9; 15 to 19; 20 § 1, 3, 4, 5; 21 to 27 and 31 will apply from January 1, 2026.
It can be noted that during the transitional period from October 1, 2023 to December 31, 2025, the importer's obligations will be limited to reporting obligations.
2. Context and objectives of the MACF
The MACF is in line with the measures taken in recent years in the field of climate action and, in particular, Directive 2003/87/EC of the European Parliament and of the Council which established the quota trading system greenhouse gas emissions in the Union, known as the "EU ETS".
However, while these measures have made it possible to reduce greenhouse gas emissions within the European Union, they did not make it possible to combat emissions linked to imports into the territory of the Union which, for their part, , continued to increase.
In fact, to escape European regulations, certain companies in industrial sectors or sub-sectors have transferred their production to other countries outside the European Union. Imports from these countries have thus sometimes replaced products equivalent to those produced on the territory of the European Union whose intensity of greenhouse gas emissions was lower.
It is therefore to avoid this risk of carbon leakage that the carbon border adjustment mechanism was implemented.
Indeed, the MACF aims to guarantee that imported products are subject to a regulatory system applying carbon costs equivalent to those borne within the European Union, in particular within the framework of the EU ETS, thus ensuring an equivalent carbon price for imports and for products from the European Union.
The MACF will apply to goods imported into the customs territory of the Union from third countries, except where their production has already been subject to the EU ETS by applying it to third countries or territories, or a carbon pricing system linked to the EU ETS (3).
More specifically, the regulation applies to the goods listed in Annex I which originate in a country outside the European Union, and when these goods, or the processed products resulting from them under the processing asset referred to in Article 256 of Regulation (EU) No 252/2013, are imported into the customs territory of the Union (Art. 2 §1 of the Regulation).
The goods referred to above are also concerned when they are brought onto an artificial island, a fixed or floating structure or any other structure located on the continental shelf or in the exclusive economic zone of a Member State which is adjacent to the customs territory of the Member State. Union (art. 2 §2 of the regulations).
The list of goods and greenhouse gases relating to these goods provided for in Annex I of the Regulation is as follows:
- cement (NC 2507 00 80, 2523 10/21/29/30/90);
- electricity (NC 2716);
- fertilizers (CN 2808 00 00, 2814, 2834 21 00, 3102, 3105);
- cast iron, iron and steel (CN 2601 12 00, 72, 7301, 7302, 7303, 7304, 7305, 7306, 7307, 7308, 7309 00, 7310, 7311 00, 7318, 7326);
- aluminum (CN 7601, 7603, 7605, 7606, 7607, 7608, 7609 00 00, 7610, 7611 00 00, 7612, 7613 00 00, 7614, 7616);
- hydrogen (NC 2804 10 00).
However, imports (into the customs territory of the European Union) of goods whose value does not exceed, per consignment, that defined for goods of negligible value referred to in Article 23 of the Regulation are excluded from this system. (EC) n°1186/2009, i.e. a value of 150 euros (art. 2 §3 a. of the regulations).
Furthermore, Annex III also excludes from the scope of the regulation certain countries and territories, such as Iceland, Liechtenstein, Norway, Switzerland, or the territories of Büsingen, Heligoland, Livigno, Ceuta or even Melilla.
This exclusion finds its justification in the existence of existing agreements between the European Union and these territories, such as the EU ETS.
4. Obligations imposed on importers by the MACF
4.1 Obligations during the transitional phase: the MACF report
a) Obligations incumbent on the importer or the indirect customs representative (Art. 32 of the Regulation)
Article 32 of the regulation specifies that during the transitional period from October 1, 2023 to December 31, 2025, the obligations of the importer will be limited to the reporting obligations provided for in articles 33, 34 and 35 of the regulation.
The article specifies that when the importer is established in a Member State and appoints an indirect customs representative, and if he consents thereto, then the reporting obligations will be incumbent on this indirect customs representative.
If the importer is not established in a Member State, the reporting obligations will then fall to the indirect customs representative.
b) Nature of reporting obligations (art.35 of the regulation)
The importer, or in the situations referred to in Article 32, the indirect customs representative, who has imported goods during a given quarter of a calendar year, must submit to the Commission for the quarter in question, “a MACF report” containing information on the goods imported during the said quarter, no later than one month after the end of the said quarter.
In accordance with Article 35 of the Regulation, this MACF report contains the following information:
- the total quantity of each type of goods, expressed in megawatt-hours for electricity and in tonnes for other goods, specified for each installation producing the goods in the country of origin;
- the total actual intrinsic emissions, expressed in tonnes of CO2 equivalent emitted per megawatt-hour of electricity or, for other goods, in tonnes of CO2 equivalent emitted per tonne of each type of goods, calculated in accordance with the method described in Annex IV;
- total indirect emissions, calculated in accordance with the implementing act still to be adopted by the European Commission (Articles 35 §7 and 7 §7 of the Regulation);
- the carbon price due in the country of origin for the embodied emissions of the imported goods, taking into account any rebates or other forms of compensation available.
The European Commission will be responsible for monitoring these reports (art. 35 §3 of the regulation). Indeed, it will periodically communicate to the competent authorities of the Member State in which the importer, and/or the indirect customs representative is established, the list of importers or indirect customs representatives who do not comply with their reporting obligations. .
Similarly, if a MACF report is incomplete or incorrect, the Commission will inform the Member State concerned, indicating the list of additional information it considers necessary. The competent authority will then be able to initiate a rectification procedure and will communicate to the importer the additional information necessary to correct this report (art. 35 §4 of the regulations).
Finally, this transitional period should enable the customs authorities to inform customs declarants of the obligation to communicate information, in order to contribute to the collection of information and, where appropriate, to make them aware of the need to request the Authorized MACF registrant status.
4.2. Obligations from December 31, 2024: request for authorization of MACF declarant status
The regulation providing that in the long term, only an authorized MACF declarant will be able to import goods into the customs territory of the European Union (art. 4 of the regulation), it is planned, from 31 December 2024, that the importer make a request to obtain authorized MACF registrant status.
The importer may also appoint an indirect customs representative who may then be responsible for submitting the authorization request (art. 5).
The authorization request must contain the following information relating to the importer:
" his name, address and contact details; his EORI number; its main economic activity carried out in the EU; certification by the tax authority of the Member State where the applicant is established attesting that the applicant is not the subject of an unexecuted recovery order for national tax debts; a sworn statement in which the applicant certifies that he is not involved in breaches of the regulations in force; the information necessary to demonstrate the applicant's financial and operational capacity to fulfill its obligations under the Regulation; the estimated monetary value and volume of imports of goods into the customs territory of the Union, by type of goods, for the calendar year in which the application is submitted and for the following calendar year; the names and contact details of the persons on whose behalf the applicant is acting…”
The regulation specifies that the applicant may withdraw his application at any time and, in the event of changes to his information, the MACF declarant must inform the competent authority without delay through the MACF register (4) (art. 5 §7 of the regulations).
b) Authorization request procedure
The request for authorization from the authorized MACF declarant must be made through the MACF register and contain a certain amount of information.
In accordance with Article 17 of the Regulation, this application for authorization must be submitted to the competent authority of the Member State in which the applicant is established provided that certain criteria are met. Thus, before granting the authorized MACF declaring status, the competent authority will carry out a consultation procedure on the application for authorization via the MACF register and will check, for example, that the applicant is not involved in a serious infringement or repeated to customs legislation or tax regulations, or that the applicant has the financial and operational capacity necessary to fulfill its obligations.
The competent authority may also require the lodging of a guarantee if the applicant was not established during the two financial years preceding the year during which the application was submitted (art. 17 §5 of the regulations).
This procedure will involve the competent authorities of the other Member States and the Commission and will not exceed 15 working days.
In the event of acceptance of the status of MACF declarant, the decision will be recorded in a MACF register (art. 17 §4 of the regulations).
Conversely, the decision refusing to grant the status of authorized MACF declarant must, where applicable, specify the reasons for the refusal and contain information on the possibilities of appeal (art. 17 §3 of the regulations).
Finally, the regulation also specifies that the competent authority may revoke the status of MACF declarant at its request, or if the conditions necessary for obtaining this status are no longer met (art. 17 §8 of the regulation).
4.3. Obligations from January 1, 2026: import of goods by the authorized MACF declarant, filing of a MACF declaration and purchase of MACF certificates
a) Only authorized MACF declarants will be able to import goods into the territory of the European Union
From January 1, 2026, the customs authorities do not authorize the importation of goods by a person other than an authorized MACF declarant (art. 25 §1 of the regulation).
The customs authorities will be empowered to carry out checks on the goods including with regard to the identification of the authorized MACF declarant, the 8-digit CN code of the goods, the quantity and the country of origin of the imported goods, the date of declaration or the customs procedure.
b) The MACF statement
By May 31 of each year at the latest, and for the first time in 2027 for the year 2026, each authorized MACF declarant must use the MACF register to submit a MACF declaration for the previous calendar year (art. 6 §1 of the regulations).
This declaration aims in particular to declare the intrinsic emissions of the goods imported into the customs territory of the Union and to return the number of MACF certificates corresponding to these declared emissions.
More specifically, this declaration must contain the following information (art. 6 §2 of the regulations):
- the total quantity of each type of goods imported during the previous calendar year, expressed in megawatt hours for electricity and in tonnes for other goods;
- the total intrinsic emissions of the goods covered by the scheme;
- the total number of MACF certificates to be returned corresponding to the intrinsic emissions, namely the direct emissions emitted during the production of goods and the indirect emissions resulting from the production of electricity which is consumed during the production process, after reduction due to the carbon price paid in a country of origin.
- copies of the verification reports drawn up by the accredited verifiers in charge of verifying the total embodied emissions declared in the MACF declaration, at the request of the authorized MACF declarant (in accordance with Article 8 of the Regulation).
c) Purchase of MACF certificates
Importers will have to buy certificates to cover the greenhouse gas emissions caused by imported products. If a carbon price already exists in the third country from which goods imported into EU customs territory come from, importers will only pay the difference with the European market price.
In practice, the authorized MACF declarant may request, in the MACF declaration, a reduction in the number of MACF certificates to be returned depending on the carbon price actually already paid in the country of origin for the intrinsic emissions declared (art. 9 §1 of the regulations).
I) Purchase of MACF certificates by the MACF declarant on a common central platform
In accordance with Article 20 of the Regulation, each Member State will sell MACF certificates on a common central platform to authorized MACF registrants established in that Member State and managed by the Commission. The Commission will ensure that each MACF certificate is assigned a unique identification number when it is created (art. 20 §5 of the regulation).
MACF certificates will be sold to authorized MACF registrants at the price calculated on the basis of the average closing price of EU ETS allowances on the auction platform (Art. 21 §1 of the Regulation). Furthermore, the Commission should be responsible for calculating and publishing this average price.
Finally, MACF certificates should be valid for a limited time from the date of purchase.
II) Operation of the common central platform
The Commission and the competent authorities will have access to the information on the common central platform.
Information relating to the sale, redemption and cancellation of MACF certificates appearing on the common central platform will be transferred to the MACF register at the end of each business day (Art. 20 § 3 of the Regulation).
III) Return of certificates
By May 31 of each year at the latest, and for the first time in 2027, for the year 2026, the authorized MACF declarant must return, through the MACF register, the number of certificates corresponding to the intrinsic emissions declared.
The Commission will then remove the MACF certificates from the register and the authorized MACF registrant will ensure that the required number of MACF certificates are available on his account in the MACF register (Art. 22 §1 of the Regulation)
The authorized MACF declarant may request in the MACF declaration a reduction in the number of MACF certificates to be returned in order to take into account the carbon price paid in the country of origin for the intrinsic emissions declared ("credit of certificates corresponding to what has already been paid”) (art. 9 §1 of the regulations).
The regulation specifies that the authorized MACF declarant must keep the necessary documents to demonstrate that the intrinsic emissions declared have indeed been subject to a carbon price in the country of origin of the goods which has actually been paid (art. 9 §2 of the regulation). ).
IV) The redemption of certificates
The authorized MACF declarant may request the redemption of the excess MACF certificates remaining in his account by the Member State in which he is established. This redemption will be carried out by the Commission on behalf of the Member State concerned via the central common platform (Art. 23 of the Regulation).
V) Cancellation of MACF certificates
On July 1 of each year, the Commission will cancel any MACF certificate purchased during the previous calendar year that remains on an authorized MACF registrant's account in the MACF registry. These certificates will be canceled without compensation (art. 24 of the regulations).
5. Sanctions in the event of failure to fulfill the obligations provided for by the regulations
In accordance with Article 26 of the Regulation, the authorized MACF declarant who does not return, no later than May 31 of each year, the number of MACF certificates corresponding to the intrinsic emissions of the goods imported during the previous calendar year will be liable payment of a fine.
This fine is identical to the excess emissions fine provided for in Article 16 §3 of Directive 2003/87/EC (5), increased in accordance with Article 16 §4 of the said Directive, and is applicable to during the year of importation of the goods. This fine is applicable for each MACF certificate that the MACF declarant has not returned.
In the same way, a penalty is incurred if a person other than the authorized MACF declarant introduces goods into the customs territory of the EU without respecting the obligations provided for by the regulation. It will then be liable for the payment of a fine of an amount equal to three (or even five times) the amount of the fine above. This sanction will be applicable during the year of introduction of the goods (art. 26 §2 of the regulations).
Finally, it should be specified that payment of the fine does not exempt the authorized MACF declarant from the obligation to return the due number of MACF certificates during a given year (art. 26 §3 of the regulation).
6. Monitoring the application of the MACF regulation
The European Commission will be responsible for regularly evaluating the application of the regulation and reporting to the European Parliament and the Council two years after the end of the transitional period, then every two years (art. 30 §2 and 5 of the regulation ).
The establishment of the MACF will necessarily call for the development of bilateral, multilateral and international cooperation with third countries. To this end, a forum of countries with carbon pricing instruments or other comparable instruments (“climate club”) should be created.
Each member state will have to designate the competent authority responsible for carrying out the functions and tasks provided for in the regulation and will inform the Commission (art. 11 §1 of the regulation). The Commission will have to assist the competent authorities in the performance of their functions and tasks under the Regulation (Art. 12 of the Regulation).
The European Commission will perform risk checks on the data and transactions recorded in the MACF register and will be responsible for ensuring that there is no irregularity in the purchase, holding, return, redemption and cancellation of MACF certificates. It must then inform the competent authorities concerned (art. 15 of the regulation).
In addition, the Commission will be responsible for monitoring any practices for circumventing these measures, and in particular those which may consist of slightly modifying the goods concerned to bring them within CN codes which are not listed in Annex I, or artificially split transport operations into different shipments whose intrinsic value does not exceed the threshold of 150 euros (art. 27 §1, 2 and 3 of the regulations).
To carry out its mission, the Commission may initiate an investigation following referral by a Member State, a party considering itself to be affected or disadvantaged by a practice of circumvention, or even by an organization for the defense of the environment or not. governmental (art. 27 § 4 of the regulations).
As part of the investigation, the Commission may be assisted by the competent authorities or the customs authorities (Art. 27 §5 of the Regulation).
(1) As a reminder, the European Parliament adopted this regulation on April 18, 2023. On April 25, the European Council in turn formally adopted this regulation.
(2) The list of elements which will have to be supplemented or modified are recalled in point 77 of the introduction to the rules. Delegated acts will have to be taken within the framework of the provisions laid down in Articles 2 (10), 2 (11), 18 (3), 20 (6) and 27 (6) of the Regulation.
(3) The European Commission has yet to adopt the implementing acts establishing the detailed conditions for the application of the MACF to these goods and in particular, the equivalent concepts for import into the territory of the Union, the procedures for submitting the MACF declaration or the controls to be carried out by the customs authorities.
(4) This register will take the form of a standardized electronic database containing data relating to authorized MACF certificates as well as operators and installations in third countries. The Commission will automatically make the information contained in the MACF register available in real time to customs and competent authorities.
(5) As a reminder, Article 16 § 3 of Directive 2003/87/EC provides that the amount of this fine is set at 100 euros for each tonne of carbon dioxide equivalent not returned.