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The EU's Carbon Border Adjustment Mechanism (CBAM): Addressing Carbon-Intensive Goods Imported to the EU

By
JAS Sustainability Team
September 25, 2023
The EU's Carbon Border Adjustment Mechanism (CBAM) is a regulatory framework introduced to address carbon leakage by imposing reporting requirements on importers of carbon-intensive goods, promoting transparency, incentivizing lower-emission choices, and leveling the playing field between domestically produced and imported goods.
The EU's Carbon Border Adjustment Mechanism (CBAM) is a regulatory framework introduced to address carbon leakage by imposing reporting requirements on importers of carbon-intensive goods, promoting transparency, incentivizing lower-emission choices, and leveling the playing field between domestically produced and imported goods.

As the European Union (EU) heightens its climate ambitions, there are increasing regulations related to "carbon leakage." This phenomenon occurs when EU-based companies shift carbon-intensive production to countries with less strict climate policies, potentially increasing emissions. To address this, the EU has introduced the Carbon Border Adjustment Mechanism (CBAM), an environmental regulation designed to establish a fair price for carbon emissions associated with the production of carbon-intensive goods entering the EU. Its purpose extends to encouraging cleaner industrial practices in non-EU countries. 

Goods Covered in the Initial Phase: 

The CBAM's scope encompasses products like cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen in the transitional phase. Moreover, there are plans to evaluate the possibility of expanding the range of covered products by 2030, potentially including additional sectors. 

Impacts: 

  • Importers must carefully track and report emissions data for their imported goods. The European Commission is developing IT tools to help importers report and manage this data. 
  • Non-compliance with reporting requirements may result in financial penalties. 
  • The regulation introduces an additional layer of complexity in the import process. 

Timeline: 

As the CBAM unfolds between 2023 and 2035, it will have significant implications for industries, global competitiveness, and the fight against climate change. Here are some key dates to keep in mind: 

  • October 1, 2023: The CBAM enters its transitional phase. Importers of carbon-intensive goods begin reporting embedded greenhouse gas (GHG) emissions. 
  • January 31, 2024: The first reporting period for importers concludes. Flexibility in reporting methodologies is allowed. 
  • January 1, 2025: Reporting using only the EU method becomes mandatory. 

Benefits: 

  • Importers disclosing emissions data enhances transparency about the carbon impact of goods. 
  • The regulation incentivizes importers to choose lower-emission products, driving sustainable choices. 
  • Imported goods are subject to emissions reporting similar to domestically produced goods, leveling the playing field. 
  • The regulation raises awareness about carbon emissions associated with international trade. 

How Can JAS Support You? 

  • EU Import Customs Clearance: Our team of customs experts consult you and assist you in expediting the customs clearance process and the complexity of tariff codes, duties, taxes, and international trade regulations.* 
  • EU Regulation Monitoring: We keep you informed about CBAM updates and evolving regulations, ensuring you remain compliant and adaptable to changes. 

*The importer is at all times responsible for providing all documentation related to customs clearance, including correct shipment/tariff and emission-related data. 

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After walking away from talks in November 2024, the ILA has signaled the possibility of a renewed strike if their demands are not addressed before the January 15, 2025, deadline.

Potential for Renewed ILA Strike Over Automation Disputes

Negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) have reached a critical impasse, primarily due to disagreements over port automation. After walking away from talks in November 2024, the ILA has signaled the possibility of a renewed strike if their demands are not addressed before the January 15, 2025, deadline.

This situation follows a previous three-day strike in early October 2024, which temporarily halted operations at ports along the East and Gulf Coasts. While those ports have since resumed operations, the disruption caused widespread delays and financial strain on the U.S. economy. The recent suspension of strike action was agreed upon for 90 days, ending January 15, 2025, but with negotiations stalled, the risk of further disruption looms large.

Impact of Previous Strike Action

The October strike caused significant delays, cost overruns, and operational disruptions, including:

  • Shutdowns at 36 ports handling over half of U.S. container volume.
  • Increased fees for freight storage, detention, and other services.
  • Prolonged transit times due to vessel rerouting.
  • Downstream effects on retailers and supply chains during peak season.

Mitigating Future Disruptions

To minimize risks, businesses should consider these strategies:

  1. Divert shipments to alternate ports, such as those on the West Coast.
  2. Anticipate congestion at rerouted locations.
  3. Leverage air freight for time-sensitive cargo.
  4. Utilize intermodal solutions for inland transportation.
  5. Be prepared for increased shipping costs and fees.
  6. Stay informed and work proactively with logistics partners to reduce delays.

Guidance from JAS

JAS remains committed to supporting clients during these uncertain times. If your operations are at risk of being impacted, we strongly encourage you to reach out to your JAS representative. Our team can provide tailored solutions to mitigate disruptions, streamline supply chains, and optimize freight options. Whether through alternative routing, expedited services, or strategic planning, JAS is here to help you navigate these challenges effectively.

XL Tanks from Netherlands to Sweden: A Seamless Logistics Solution

JAS Projects recently completed a comprehensive logistics solution for Gpi Tanks XL, a company specialized in stainless steel tank construction, either on-site or at one of their flexible construction locations near a waterway, as was the case with this project. This project involved transporting large industrial tanks from Zwijndrecht, Netherlands, to Uddevalla, Sweden, where they will be used to recycle de-icing liquid for major Scandinavian airports.

The operation in Zwijndrecht required careful coordination due to tidal constraints and limited water depth. With a maximum draft of 3.5 meters at the loading berth, and the vessel entering with a 3.2-meter draft, precise planning was critical. Using an overhead crane, the tanks were loaded onto trailers before being transferred to the vessel by a mobile crane. Despite facing high winds and a two-day delay due to storms, the entire loading process was completed in just six hours.

A 700-ton mobile crane was utilized during loading to maintain a safe 33-meter radius, ensuring no pressure was placed on the jetty. The vessel, sailing with open hatch covers to accommodate the tank height, ensured smooth and secure transport to Sweden.

Upon arrival at the client’s site in Uddevalla, discharge operations were executed efficiently. The tanks were unloaded and installed onto their foundations within ten hours. JAS Projects coordinated the movement of the first tank directly to its foundation, while the second was temporarily stored on steel stools. The team also managed a last-minute client request to arrange the installation of a walkway and spiral stairs.

This project exemplifies the JAS Projects’ team ability to overcome logistical challenges and deliver customized solutions with precision. From factory to foundation, JAS provides end-to-end logistics expertise, ensuring that every project is completed on time, safely, and with the highest level of care.

JAS Worldwide, a global leader in logistics and supply chain solutions, headquartered in Atlanta, USA, is excited to announce its collaboration with ALPHA Augmented Services.

Atlanta, USA – November 25, 2024 – JAS Worldwide, a global leader in logistics and supply chain solutions, headquartered in Atlanta, USA, is excited to announce its collaboration with ALPHA Augmented Services, a technology innovator in logistics optimization, headquartered in Zug, Switzerland. This partnership represents one of the many steps JAS is taking to integrate AI-driven solutions into a broader strategy for delivering sustainable, efficient, and innovative logistics solutions.  

 

As part of its innovation roadmap, JAS will incorporate ALPHA’s advanced AI technology to explore new ways of optimizing air, ocean, and road freight logistics. The collaboration aligns with JAS’s commitment to leverage emerging technologies to support its customers’ goals for cost efficiency and carbon footprint reduction, all without requiring significant capital investment.  

 

“This partnership with ALPHA reflects our ongoing strategy to integrate innovative tools with technology that complement JAS’s broader vision for sustainable and intelligent logistics solutions, said Andrea Goeman, SVP QHSE & Sustainability at JAS Worldwide. “ALPHA’s optimization capabilities are a valuable addition to our portfolio, offering our customers enhanced efficiency, operational savings, and a reduced carbon footprint for their shipments.” 

 

JAS remains dedicated to exploring technologies like ALPHA’s to advance its mission of creating smarter, greener logistics solutions. This partnership underscores JAS’s leadership in driving sustainability and innovation while maintaining its focus on a diversified approach to forward-thinking logistics solutions. 

 

About JAS Worldwide 

JAS Worldwide, a global leader in logistics and supply chain solutions, was founded in Milan, Italy, in 1978. Headquartered in Atlanta, Georgia, USA and supported by 7,000+ team members in more than 100 countries, it builds innovative and sustainable solutions that focus on customer needs and a better future for all. At the heart of JAS's success is its people who deliver customer value. As one of the largest and fastest growing family-owned logistics companies, JAS is committed to creating opportunities for our communities, customers, and colleagues to thrive. Together. 

 

About ALPHA Augmented Services 

Headquartered in Zug, Switzerland, ALPHA Augmented Services specializes in logistics optimization, helping businesses streamline their supply chains for greater efficiency and reduced environmental impact. ALPHA’s technology empowers companies to achieve operational excellence in logistics. 

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