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Introduction to MACF Customs

What is MACF?

The Carbon Border Adjustment Mechanism (MACF, or CBAM in English) aims to counter the risks of evasion linked to the ambitious climate policy of the European Union, particularly the phenomenon of “carbon leakage.”

This system operates on a quota-based mechanism similar to the emissions trading system (ETS) established in 2005 within the EU. The MACF imposes specific requirements for the importation of certain industrial products to ensure they comply with equivalent environmental standards.

Unlike a commercial or tariff measure, the MACF is an environmental policy measure. In France, it is the General Directorate for Energy and Climate (DGEC) of the Ministry for Ecological Transition that is responsible for its implementation and monitoring.

For more information on the implications of the MACF, you can consult:

Stay alerted about products affected by the MACF with the OK!DUTY audit

Importance of the MACF for businesses

You are concerned if:
  • You import goods listed in Annex 1 of Regulation 2023/956, such as steel (excluding certain ferro-alloys), aluminum, nitrogen fertilizers, cement, hydrogen, or electricity for release into free circulation on the customs territory of the EU.
  • You are an indirect customs representative and act as an authorized MACF declarant for the importation of these goods.
The concerned flows must meet the following cumulative criteria:
  • Import flows in the customs sense, meaning the release into free circulation of goods listed in Annex 1 of the regulation.
  • Goods with an intrinsic value greater than 150€ per shipment.
Warning: you are not concerned if you import these goods from Iceland, Norway, Liechtenstein, Switzerland, or certain territories of Member States (Ceuta, Melilla, Livigno, Büsingen).

Objectives of the MACF Customs

Protection of domestic industries

The Carbon Border Adjustment Mechanism (CBAM) protects domestic industries by ensuring that imported products are subject to the same environmental constraints as locally produced goods. This helps guarantee a fair competition and prevents European producers, who are subject to strict and costly regulations, from being disadvantaged against foreign competitors who do not adhere to the same standards. By leveling the market conditions, CBAM also encourages European industries to maintain their production on the continent, thus supporting local employment and economic growth.

Prevention of Unfair Trade Practices

The CBAM also plays a crucial role in the prevention of unfair trade practices. By applying carbon pricing on imported products, it discourages foreign companies from taking advantage of more relaxed environmental regulations in their home countries to reduce production costs. This helps prevent environmental dumping, where products are sold at artificially low prices due to neglected environmental costs. By establishing fair rules, the CBAM promotes a fairer and more sustainable international trade, encouraging all actors to adhere to high environmental protection standards.

Principles and functioning of the Carbon Border Adjustment Mechanism (CBAM) Customs

Legal and Regulatory Framework

Since October 1, 2023, Regulation (EU) 2023/956 has established the Carbon Border Adjustment Mechanism (CBAM) of the European Union. This system aims to reduce carbon emissions, establish a fair price for the carbon emitted during the production of carbon-intensive goods imported into the EU, and promote cleaner industrial production, in line with the Paris Agreement and the EU’s Fit for 55 package. The CBAM will be deployed progressively and is part of the gradual phase-out of free quota allocations in the EU Emissions Trading System (ETS). This transitional phase aims to:
  • Serve as a pilot period for importers, producers, and authorities to adapt their practices.
  • Collect emission data to refine the method for calculating intrinsic emissions.
  • Harmonize the carbon price of EU-produced goods with that of carbon-intensive imported goods.

Methods for calculating customs duties and fees

To calculate the amount of your fees, you need to add the value of the goods, freight and insurance costs, as well as any additional charges. Then, multiply the total by the applicable customs duty rate to obtain the amount of customs duties to pay for your shipment.

Principles of implementation of the Carbon Border Adjustment Mechanism (CBAM) Customs

Declaration of goods

The European Commission has provided businesses with a detailed course that includes comprehensive regulatory explanations and a step-by-step tutorial. This course aims to guide businesses through the various stages of the declaration process, explaining the legal obligations and best practices to ensure compliance. The tutorial provides clear instructions and practical examples for correctly completing the report, also addressing common questions and potential difficulties businesses might face. In addition, additional resources, such as downloadable guides and explanatory videos, are available to deepen the understanding of the procedures.

Audits and Inspections

The implementation of this new European regulation includes a transition phase running from October 1, 2023 to December 31, 2025. During this transition period, the obligations related to the CBAM will gradually strengthen. By 2026, it will be necessary to obtain CBAM declarant status. Importers will then be required to calculate the carbon emissions related to their imports, purchase CBAM certificates corresponding to the emissions generated during the year, and comply with an annual reporting obligation. To help businesses prepare before January 1, 2026, customs authorities are offering a task list that includes:
  • Registration with your EORI number.
  • Submission of quarterly reports.
  • Purchase of certificates to build the required stock.
  • Option for returning unused certificates.
Currently, some points remain unresolved and require special attention. Details regarding the purchase of certificates and accredited bodies have not yet been published. It is also important to note that a penalty system will be introduced for non-compliance.

Timeline (Key Dates)

The implementation of this new European regulation includes a transition phase spanning from October 1, 2023 to December 31, 2025. During this transition period, the obligations related to the MACF will gradually become more stringent. By 2026, it will be mandatory to obtain the MACF declarant status. Importers will then need to calculate the carbon emissions associated with their imports, purchase MACF certificates corresponding to the emissions generated over the year, and comply with an annual reporting obligation. To help businesses prepare before January 1, 2026, the customs authorities are offering a list of tasks, which includes:
  • Registration with your EORI number.
  • Submission of quarterly reports.
  • Purchasing certificates to build up a necessary stock.
  • The possibility of reclaiming unused certificates.
As of now, certain points remain unresolved and require particular attention. Not all modalities regarding the purchase of certificates and accredited bodies have been published yet. It is also important to note that a penalty system will be introduced for non-compliance.

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