CBAM EU declaration operation case drill example 

1. Case drill introduction outline 

• Assumption: I am a Taiwanese domestic manufacturer 

• A Trade type: I am about to export goods to the EU to solve the problem: I need to fill out the CBAM form in this quarter. 

• Submission object: Provided to local importers (customers) for declaration 

• Verification items: No verification is required during the trial operation declaration period. 

• The commodity "Commodity Duty 730729" stainless steel pipe installation. 

Please give a detailed example of the complete process, from the company's own internal operations to the internal execution process, and finally generate the CBAM communication template (declaration form) to the outside (EU importer client) to facilitate the process of providing the customer (EU local importer) with CBAM EU declaration 

• Tariff number confirmation: Confirm whether it is CBAM managed. First, follow up with the exporter (customer) to inquire about the EU tariff number of the products they declare, or check by themselves (it should be noted that importers sometimes choose to declare the tax number to be managed in order to save taxes). 

• Product declaration scope confirmation: It has been determined that your products need to be declared for CBAM, and the information and scope that need to be declared are confirmed. 

• Calculation of product carbon content: That is, confirm the precursors (raw materials), internal and external processes, enumerate the emission items caused by the tariff label product, and calculate the sum and allocation (excluding transportation, use, and disposal).

•  Fill in the CBAM declaration form: After calculating the average tariff product for export by yourself, start filling out the CBAM declaration form and send it to the importer (customer) for declaration business.  

2. Analysis of the CBAM declaration process 

To ensure that as a manufacturer, export to the EU smoothly and comply with the requirements of the Carbon Border Adjustment Mechanism (CBAM), the following is the detailed process from internal preparation to the final submission of the CBAM communication template (declaration form) to the local importer in the EU: 

A. Internal Preparation Work 

A1. Determine the Product Scope Identification ) 

First, it is necessary to determine whether your product meets the specifications of CBAM. Depending on the GST 730729 you provide, products such as stainless steel pipe fittings may be included in the CBAM regulations due to their high energy consumption and carbon emissions during production. 

Product Screening: Evaluate which products fall within the scope of CBAM regulations. This step involves reviewing the production process and raw material sources of all products, especially those with high carbon emissions, such as stainless steel fittings, which are subject to commodity tax 730729. 

Regulatory Alignment: Confirm the classification of products against EU regulations to ensure that all products that need to be declared are included. 

A2. Carbon Emission Data Collection 

companies need to establish a cross-departmental working group to collect carbon emission data from all production processes. This includes both direct emissions (such as fuel used in the production process) and indirect emissions (such as purchased electricity). It is necessary to record the source, type, and corresponding carbon emission factors of energy consumption in detail. 

• Data Source Integration: Integrate internal data sources to collect raw material purchase records, energy consumption data, etc. 

• Preliminary Carbon Footprint Assessment: Assess the carbon impact of the collected data, including direct and indirect emissions.  

• Confirm and list the company's products one by one, including precursors (raw materials) and manufacturing processes, such as A~C products in the figure below: 

A3. Carbon Emission Calculation 

uses calculation methods provided by the European Union or calculation tools verified by third-party parties to determine specific carbon emissions. If possible, use actual measured data instead of default values to improve the accuracy of your reports. 

• Calculation Methodology: Calculate the carbon emissions of products using internationally recognized carbon emission calculation standards, such as GHG Protocol or ISO 14064. 

• Verification and Adjustment: Conduct internal verification and make adjustments if necessary to ensure the accuracy of the calculation results. 

• Types of greenhouse gases under CBAM management: In addition to fertilizers and primary aluminum ingots, different greenhouse gases need to be declared (refer to the figure below), the most important of which is still only carbon dioxide. 

• Carbon content accounting step (example): 

1.Confirm which production equipment is available to confirm the precursors (raw materials) and 

2.their carbon content (request from suppliers).

3.Confirm the types of process equipment emissions and classify them into direct and indirect 

direct emissions: combustion, chemical, and dispersion.

 Indirect emissions: electricity.

4. Collect equipment and process data

• Collect gas or fuel usage

• Equipment specifications

• Electricity meters

• Operating hours

• Output

5.Estimate carbon emissions

Convert the data into carbon emissions using direct monitoring, mass balance, emission factors, etc. 

• CBAM: Calculations based approaches, 

1.Standard Methodology

 (average of activity data (fuel or production input consumption), × emission factor), 

2.Mass Balance Approach 

(balance calculation using the input, outflow, and conversion of material mass and energy in the process).

3. Measurement based approaches

 (with continuous emissions monitoring or intermittent sampling)

•  Common Calculation Method (Emission Factor Method)

1. The most commonly used and convenient calculation method for CBAM is to use the emission factor method of equipment to calculate and 

2.estimate the equipment specifications: For Example

3.When factory equipment is not equipped 

• with equipment sub-meters, equipment specifications: always converted to power (kW) 

• Power (kW): Some equipment power is W, please note that the unit conversion 

• horsepower (HP): horsepower x 0.746 = power (kW). 

Ps. The formula for converting between horsepower (hp) and power (kilowatt, kW) is as follows: 

• 1 horsepower (hp) = 0.7457 kilowatts (kW) 

• To convert horsepower to kilowatts, you can use the following formula: (kW=hp×0.7457) 

• Machining time: Always converted to hours (hr)

•  Production volume: Always converted to metric tons (Ton) power (kW) x Hour (hr) / Output (Ton) = Degree (kWh) / Ton (Ton) 

• Buffer Requirements (before 2024/12/31) 

1.Manufacturers can calculate, monitor, and report the carbon content of their products using the following methods (if the scope and accuracy of emissions are similar to the previous paragraph)

•  Carbon Pricing Mechanism 

• Mandatory Emission Monitoring Program 

• Verified Emission Monitoring Plan 

       2.Default Values (before 2024/07/31) 

• If complete information on carbon content cannot be obtained using the above methods, 

• the default values announced by the European Commission during the transition period can be used Usage limit within 20% (can only be used after 7/31/2024) 

B. Internal Execution Process 

B1. Establishment of Carbon Emission Reporting System 

Develop or purchase a carbon emission reporting system for automated collection, calculation, and reporting of carbon emission data. This system should be able to organize data in accordance with EU format requirements for easy reporting. 

• System Design: Design or purchase a carbon emission reporting system to automatically collect and process carbon emission data.

•  System Integration: Integrate with existing IT infrastructure to ensure seamless data flow. 

B2. Staff Training: 

Conduct professional training for employees involved in carbon emission calculation and reporting, ensuring they understand the requirements of CBAM and how to use the carbon emission reporting system. This includes understanding relevant environmental regulations, carbon emission calculation standards, and reporting processes. 

• Training Planning: Plan comprehensive training courses to educate employees on CBAM requirements and system operations. 

• Knowledge Reinforcement: Regularly hold workshops and seminars to update the latest regulations and operational tips. 

• Document Review: Conduct a final document review to ensure all information is accurate 

B3. Internal Audit: 

Conduct regular internal audits to verify the accuracy and completeness of carbon emission data. Audits can be performed by internal audit departments or entrusted to external professional organizations. 

• Audit Implementation: Conduct regular internal audits to check the accuracy and completeness of carbon emission reporting. 

• Audit Feedback: Provide feedback based on audit results, adjusting relevant processes and systems in a timely manner. 

C. Produce the CBAM Communication Template and Provision to EU Clients 

C1. Fill in the CBAM Communication Template Based on the internally confirmed and audited carbon emission data, fill out the CBAM communication template. This includes basic information about the company and products, detailed calculation of carbon emissions, carbon emission factors used, and relevant supporting documents. 

• Template Completion: Fill out the official CBAM communication template based on the collected data, ensuring that all requested information is accurately recorded. 

• The CBAM declaration form has a total of 13 tabs, which can be roughly divided into 3 categories:  

C2. Document Management 

digitally manages all relevant documents and data and keeps historical records. This is important for possible audits and the need to provide them to EU customers. 

• Document Storage: Digitize and save the completed CBAM communication template and related documents to ensure long-term access and traceability. 

• Security Management: Implement data security policies to protect stored documents from unauthorized access and damage. This includes using encryption technology and setting up multiple layers of security measures, Ensuring the confidentiality and integrity of documents.

C3. Provision to EU Clients 

Provide the completed CBAM communication template (form) and supporting documents to the EU importer via a secure digital platform. Ensure the security of communication and the confidentiality of data. 

• Data Transmission: Send CBAM communication templates and related supporting documents to importers in the EU via secure electronic means. This may include using secure file transfer protocols like SFTP or transmitting via encrypted email. 

• Confirmation of Receipt: Obtain a notification from the EU importer to confirm receipt, ensuring that the documents have been properly received and available for the declaration process. 

C4. Continuous Updates and Communication 

Regularly update the information in the CBAM communication template based on EU requirements or changes in the production process. At the same time, maintain regular communication with EU importers to address any queries they may have about carbon emission reporting. By following these detailed steps, your manufacturing business can effectively navigate CBAM filing requirements and maintain smooth trade relations with the EU market. This not only helps comply with regulatory requirements but also enhances the company's brand image and competitiveness in the international market. 

• Regular Updates: Regularly update the CBAM communication template in response to new EU regulations or any changes in the production process. This includes revisions to carbon emission calculations and any regulatory changes that may affect CBAM filings. 

• Proactive Communication: Maintain active communication with EU importers to address any questions they may have about carbon emission data or the declaration process. This helps establish a transparent and effective business relationship and ensures that both parties have a shared understanding and expectations regarding the filing process.  

3. Internal implementation of CBAM declaration project setting 

The following is for the owner's reference on how to carry out the internal declaration project implementation operation, which is not a necessary procedure for CBAM declaration (the CBAM declaration obligor is the importer, not the domestic exporter). 

• Internal declaration project operation initiation KPI setting:

A. Internal preparation operation

A1. Determination of product scope:

 A2. Carbon emission data collection: 

A3. Carbon emission calculation:

 B. Internal execution operation process

B1. Establishment of carbon emission reporting system: 

B2. Employee training:

 B3. Internal audit: 

C. Output CBAM communication template and provide it to EU customers

C1. Fill in the CBAM communication template:

 C2. Document management: 

C3. Provide to EU customers: 

C4. Continuous updates and communication: 

Gantt Chart KPI Schedule: All 90 days (1 quarter/3 months) 

A. 30 days B. 30 days C. 30 days 

Phase: 

A. Internal preparations (Day 1 to Day 30) 

• Start Date: Today's 

• End Date: 30 days plus 30 days from today

•  Activities: Determine product range, collect carbon emission data, and conduct preliminary carbon emission calculations. 

B. Internal Execution Procedures (Day 31 to Day 60) 

• Start Date: Day 31 

• End Date: Day 60 

• Activities: Establish a carbon emission reporting system, train employees on CBAM requirements, conduct internal audits. 

C. Produce and provide CBAM communication templates to EU customers (Day 61 to Day 90) 

• Start Date: Day 61 

• End Date: Day 90 

• Activity: Complete and submit CBAM communication templates, document management, initial communication with EU importers. 

Timeline: 

• Each task is clearly divided into 30-day blocks, focusing on specific goals and outputs. 

• The end of one phase smoothly transitions to the beginning of the next, maintaining momentum and ensuring that the prerequisites for each stage are met before moving on to the next.  

• For Example in the second case drill , 

• if we take product A as an example: 

• product type: product 

1.precursor of product A: factory A plate element、......。 

2.All process equipment: wire drawing machine, forming machine, orthodontic machine, welding machine, dipping furnace, sorting machine.

3. Direct emissions (combustion, chemical, dispersion...) ): Drawing machines, forming machines, orthodontic machines, welding machines, dipping furnaces.

4. Indirect emissions (electricity): wire drawing machines, forming machines, orthodontic machines, welding machines, immersion furnaces, sorting machines. 

• Carbon content accounting steps:

1.Confirm what production equipment and precursors are available. 

2.Identify the types of equipment emissions and classify them into direct and indirect emissions 

• Direct emissions: combustion, chemical, dispersion 

• Indirect emissions: electricity 

      3.Collect equipment and process data 

• Collect gas or fuel usage equipment specifications 

• Electricity meter operating time and output

•  Estimate carbon emissions

4. The data is converted into carbon emissions using methods such as direct monitoring, mass balance, and emission factors.