Get ready for CBAM - Compliance Insights for Aluminium Industry Players

Get Ready for CBAM Compliance Insights for Aluminium Industry Players 15 JANUARY 2024

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About CarbonChain We help climate-critical sectors take action Leading carbon accounting software for manufacturers, traders and banks

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Tailored for commodities (Metals & Mining, Energy, Agriculture) We map every supply chain with precision

We fill the gap for comprehensive, accurate, verifiable and auditable CO2e calculations, using: Asset-level, independent emissions database Robust, globally-trusted methodologies

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2022. All rights reserved.

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Contents

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01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

The EU CBAM The EU’s Carbon Border Adjustment Mechanism has officially been signed into law.

Starting in October 2024:

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Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

The EU CBAM The EU’s Carbon Border Adjustment Mechanism has officially been signed into law.

Starting in October 2024:

10-50 EUR per tCO2e 9

not declared or under-declared

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Checklist for importers

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Checklist for importers

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Checklist for installations

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Checklist for installations

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Primary vs. Default Values

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Primary Installation Data

EC Default Values

Installation-specific

Global averages

By product, includes embedded emissions, qualifying parameters, carbon price due and production route information.

Already released by the EU Commission Global default value per CN code.

Designed to be penalising.

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Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

Emissions covered in CBAM carbon pricing from 2026

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Indirect vs direct emissions •

During the transitional period, direct and indirect emissions are reported for aluminium (per earlier slides)

•

From 2026, the carbon pricing will not apply to those indirect emissions, because of WTO rules, but the EU wants to include them ASAP.

•

The cost difference is significant (estimated 6x more when indirect emissions are counted)

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Contents

© CarbonChain 2024. All rights reserved.

01

Overview of CBAM

02

Who’s who (exporters vs importers, declarants vs installations)

03

Who will be affected in the aluminium value chain?

04

CBAM carbon accounting versus GHG Protocol

05

Direct vs indirect emissions

06

Preparing for CBAM certificates

07

Q&A

The EU Carbon Border Adjustment Mechanism Pricing will be phased in as ETS free allocations are phased out

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Likely price paid for typical steel and aluminium Assume EU ETS price = 100 euro/tonne CO2e 2026

2027

2028

2029

2030

2031

2032

2033

2.50%

5%

10%

22.5%

48.50%

61%

73.50%

86%

100%

1000t steel

€4,000

€8,000

€16,000

€36,000

€77,600

€97,600

€117,600

€137,600

€160,000

1000t aluminium

€5,175

€10,350

€20,700

€46,575

€100,395

€126,270

€152,145

€178,020

€207,000

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Likely price paid for steel and aluminium

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How CarbonChain can help with CBAM Complete CBAM declaration with installation data filled in, for each reporting period

Identify & track which imports fall under CBAM

Importer Send data collection forms to your suppliers & track which ones have submitted their data

Compare CBAM costs of current & potential suppliers to better inform purchALFEDng decision making

Complete your data collection and supporting fill in your CBAM report over the first year

Installation Develop a monitoring methodology

Share Product Carbon Footprints to all of your international clients

CarbonChain platform

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Thank you Contact rumi@carbonchain.com

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Appendix: Aluminium Products: CBAM System Boundary

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© CarbonChain 2024. All rights reserved.