In the first instance, businesses will need to put systems in place to ensure that the correct periodic declarations are submitted in a timely manner for any imports which fall with the scope of CBAM.
They will also need to ensure that suppliers are authorised to make declarations under the mechanism. Only businesses recognised as authorised declarants based on a license issued by the appropriate authorities may file CBAM declarations.
Rules of origin will also be important. CBAM applies to all countries outside of the European Economic Area – EU member states, Iceland, Lichtenstein, Norway, and Switzerland. It, therefore, covers the UK. While electricity from Northern Ireland is exempt, it has yet to be seen how it might impact goods produced there.
In these circumstances, Irish businesses will need to interrogate their entire value and supply chains to determine which products and suppliers will be impacted by the mechanism. Those impacts may be either direct or indirect and businesses will need full visibility across their entire supply chains to be able to assess them properly.
The added complexity introduced by the new reporting regime may require businesses to take action to reshape supply chains in the near term.
For the longer term, the declarations will provide a line of sight on potential additional costs which may arise following the full implementation date in 2027. Businesses will, therefore, have time to prepare and make changes to mitigate cost increases.
In this context, there are a number of actions which Irish businesses with supply chains affected by CBAM should take. These include:
There is no doubt that CBAM will have far reaching implications for Irish businesses. But businesses have been given the gift of time, time to prepare for transitional reporting requirements later this year and time to plan for full implementation of CBAM measures from 1 January 2027.