Page 126 - Research on Financial Development Mechanism and Path of Forestry Carbon Sequestration in Developing Countries under Double Carbon Targets

Research on Financial Development Mechanism and Path of Forestry Carbon
Sequestration in Developing Countries under Double Carbon Targets

In the current CBAM Act, it will be implemented in the following two stages: in
the current CBAM Act, it will be implemented in the following two stages:
Transition period: from October 2023 to December 2025, CBAM imported from
outside the European Union stipulates that importers of products are responsible for
reporting independently, including the quantity of imported products and the corre-
sponding emissions, without payment of fees. The registration system will be launched
in December 2024.
Formal implementation period: after 2026, importers must report the quantity of
goods imported into the EU in the previous year and their carbon emissions before May
31 of each year, and purchase the corresponding quantity of CBAM certificates for off-
set. The allocation of EU-ETS’s own free emission quota will be gradually reduced un-
til it is completely cancelled in 2035, and the carbon price will be gradually increased.
The terminal selling prices of EU’s own products and imported products have increased
simultaneously, with consumers paying for the increased cost of carbon emissions.
4) Core content: objects and products of CBAM levy
The EU will levy a carbon tax on imports from countries outside the EU and the
European Economic Area (EEA). At present, the European Commission imposes car-
bon tariffs on six categories with the greatest risk of carbon leakage, namely cement,
electricity, chemical fertilizers, iron and steel, aluminum and hydrogen-related prod-
ucts, including primary products, intermediate products and downstream products in
almost all major links of iron and steel, aluminum, cement and chemical fertilizers.
Where is the boundary for calculating the carbon content of CBAM products? For
steel, aluminum and hydrogen industries, only direct emissions need to be accounted
for, while indirect emissions need to be accounted for for for fertilizer, cement and
electricity. CBAM’s definition of direct and indirect emissions: Direct emissions refer
to emissions generated during the production of products covered by the carbon trading
control, including emissions generated from heat and cold energy consumed in the pro-
duction process; Indirect emissions are emissions from the consumption of electricity
in the production process of the product.
How is CBAM carbon border tax calculated? In order to prevent EU domestic
enterprises from simultaneously enjoying the double protection of EU ETS free quota
and CBAM’s tax on imported products, the calculation of CBAM certificates requires
deducting the free quota obtained when the same products are produced in EU domes-
tic market, and taking into account the carbon price paid by the products in the original
exporting countries.

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