If you import goods into the EU, it’s your responsibility to establish whether they’re subject to the EU Carbon Border Adjustment Mechanism (EU CBAM), otherwise you could face fines
The list of tariff codes in scope of EU CBAM is here.
Are my goods covered by EU CBAM?
The EU CBAM focuses on high-emitting industries, including cement, iron and steel, aluminum, fertilizers, hydrogen and electricity.
However, not every product in those industries are included. For example, car doors made from aluminum are excluded, while nuts and bolts are included.
Do you know your CN codes?
If you know the CN codes of your goods, it's easy to identify whether they're included in the EU CBAM. All products are listed in Annex I of the EU CBAM implementing regulation.
Check our summary list of CBAM CN codes
Don’t know your CN codes? Read on.
What are the common product classifications (CN, HS, TARIC)?
CN codes are related to TARIC and HS classifications. The EU CBAM implementing regulation refers to HS headings as well as CN codes, and you can work out your product's CN code if you know its TARIC code.
Combined Nomenclature (CN) is a tool for classifying goods, set up to meet the requirements of both the Common Customs Tariff and of the EU's external trade statistics.
Harmonized System (HS) is a globally standardized numerical method of classifying traded products managed by the World Customs Organization.
Integrated Tariff Rate System (TARIC) is a system used in the EU to determine the taxes and duties applicable to the import or export of goods.
How are HS, CN, TARIC and HTS codes related?
For any given product, the first few digits of its HS, CN and TARIC codes are the same, as follows:
A CN code is made up of an HS chapter, HS heading, HS subheading and a CN subheading. A TARIC code contains extra digits at the end.
In summary:
HS headings are 4 digits long
HS codes are 6 digits long
CN codes are 8 digits long
TARIC codes are 10 digits long
It's also worth being aware of the Harmonized Tarriff System (HTS): a 10-digit classification system used in the US to help determine customs duties to be paid on imports. HTS codes are 10 digits long, and the first 6 digits are the HS code that align to the EU’s classification system.
How do CN codes align to the EU CBAM?
EU CBAM goods are identified by their CN code.
However, in EU CBAM implementing regulation, certain products (e.g. unwrought aluminium, code 7601) are listed by their 4-digit HS heading, rather than their 8-digit CN code.
Important: If your product's full CN code is not listed but the HS heading is (e.g. your product's code is 7601 00, but only 7601 is listed), then your product is covered by the CBAM.
How do I find out my product's CN code for EU CBAM?
If you operate an installation that may be producing CBAM goods, talk with your compliance and legal department. They will likely have been involved in determining and declaring the CN code of the products manufactured at your facility.
If you import goods that may be subject to CBAM, consult with your customs, procurement or logistics department. They will have information on the CN codes that sit within your import declarations (box 33 of an EU customs declaration).
What if my product contains products with CBAM CN codes?
Some products don't have a CBAM-covered CN code, but contain other products that do. We often get asked whether CBAM applies in this case.
The answer is no. The EU CBAM is only concerned with the final CN code of the good imported into the EU — and these are primarily ‘simple goods’.
In the case of car manufacturers:
Steel sheets are covered by CBAM but car bodies made from steel aren't.
Aluminium sheets are covered by CBAM but car doors made from them aren't.
What matters is what the CN code of the good is at the moment it crosses the border. It is irrelevant under CBAM if you are importing a good whose CN code is not listed, even if it’s made from a good whose CN code is listed.
Diagram showing example of aluminium goods included and excluded from CBAM declarations
Diagram showing example of steel goods included and excluded from CBAM declarations
My product has a CBAM CN code. What now?
Importers
If you’ve established that you import CBAM-covered goods, then you must prepare a CBAM report.
Installations
If you’ve established that you produce CBAM goods, then prepare for your customers to start requesting your emissions data. They will not be able to continue sourcing your products if you don’t provide this data.