� POLICY � with calculation factors such as net calorific values or emission factors .
2 . The measurementbased approach where emissions are determined through continuous measurement of flue gas flow and greenhouse gas concentrations in flue gases .
When CBAM declarants lack the required data to perform the calculations they can revert to default values to be used as emissions factors . Default values are to be published by the end of 2023 , the EU has however published a first study indicating the differences in emission intensities among the EU and its trading partners for CBAM goods ( cf . figure 2 ).
CBAM declarants can also ask their suppliers to register themselves as an operator located in a third country within the CBAM registry . They may apply the above-mentioned calculation methodology to their output and obtain verification according to EU ETS standards . Suppliers can then disclose the information on embedded emissions to CBAM declarants who in turn may use this information within their CBAM declarations .
implements the mechanism with a transitional period which started on October 1 , 2023 , and ends on December 31 , 2025 . The transitional period aims to function as a trial and educational phase for all involved parties , including importers , producers , and authorities . Its purpose is to gather valuable data on embedded emissions in order to improve the methodology for the definitive period starting January 1 , 2026 . CBAM obligations are reduced to reporting during the transitional period ( cf . figure 3 ).
To increase the learning during the transitional phase , instead of annual CBAM declarations , declarants must submit CBAM reports on a quarterly basis . The first report , covering the embedded emissions from the fourth quarter of 2023 is to be submitted by January 31 , 2024 . The calculation and general reporting requirements
are however somewhat eased for the transitional phase : In addition to the calculation methodology described above ( EU Method ), for the transitional period , two additional methodologies are available : 1 . Until December 31 , 2024 , embedded emissions can be determined through third country national systems such as carbon pricing schemes or monitoring systems whose accuracy and coverage are similar to the EU ETS .
2 . Until July 31 , 2024 , embedded emissions can be determined using only default values from the EU or elsewhere if calculation methodologies align .
For the transitional phase , all entities must report on both direct and indirect emissions . The exemptions for indirect emissions in the iron and steel sector mentioned above are only valid for the definitive
Which rules apply in the transitional period ?
Acknowledging the challenges posed by the CBAM for declarants , the EU gradually
Figure 3 CBAM time schedule . Source : carboneer .
Green Steel World | Issue 9 | November 2023 17