Check if your goods have been subject to a qualifying carbon pricing scheme
Find out if embodied emissions in your Carbon Border Adjustment Mechanism (CBAM) goods have been subject to a qualifying carbon pricing scheme.
Find out if the carbon pricing scheme meets the criteria
You need to meet all of the following criteria to be able to claim Carbon Price Relief.
The scheme must be run by, or on behalf of, a government (a province, state, region or a pair or group of provinces, states or regions) or by a supra-national organisation (such as the European Union).
The government or supra-national organisation, or organisations working on their behalf, controls how any revenue raised from the scheme is used.
The government or supra-national organisation, or organisations working on their behalf, must require by law that installations (factories, plants or facilities) that make or process CBAM goods take part in the scheme. This includes when participation only becomes mandatory after an installation emits more than a specified amount of emissions. You may still qualify for relief where an installation does not meet the mandatory threshold but has voluntarily joined a qualifying scheme.
The rules and scope of the scheme, as well as the headline carbon price of the scheme, should be made publicly available.
Participants must face a cost for their emissions in some or all cases, though they may meet this in other ways approved by the qualifying carbon pricing scheme. In all cases, the scheme must either:
- directly price each tonne of carbon dioxide equivalent (tCO2e)
- indirectly price emissions based on the use of fossil fuels at the installation during production
For schemes that price emissions indirectly, the scheme must use emissions factors taken directly from or developed using the methodology of either the:
- Intergovernmental Panel on Climate Change website
- International Energy Agency website
- United Nationals Framework Convention on Climate Change website
Taxes, schemes or duties that do not qualify as a carbon pricing scheme
The following will not qualify as a carbon pricing scheme:
- carbon prices that are not a carbon tax, Emissions Trading Scheme (ETS) or a scheme that places a price on imported goods’ embodied emissions
- carbon prices that do not charge for the emissions produced during production of the goods
- schemes that are not run by a government or supra-national organisation or organisations on their behalf, such as those run by multilateral institutions
- voluntary carbon pricing schemes, even if they’re operated by government or a supra-national organisation and apply a cost on emissions
- fuel duties, which are flat rate taxes charged for a litre, kilogram, or unit of fuel, not per tonne of emissions
If your goods are subject to a qualifying carbon pricing scheme
As your goods are subject to a qualifying carbon pricing scheme you need to get a carbon pricing verification form.