CBAM REPORTS
What is CBAM?
The CBAM mechanism reduces the risk of so-called carbon leakage. This mechanism prevents the shifting of production to countries that have little or no strict control over decarbonization, which could threaten the European Union’s goals related to reducing carbon emissions.
Our company, in collaboration with experts in this field, is equipped to prepare CBAM reports and contribute to the implementation of this instrument, thereby promoting more effective environmental protection.
CBAM term
CBAM is a cross-border carbon pricing mechanism by which the European Union applies the same carbon costs to products imported from countries outside the European Union as for products produced within the European Union.
This instrument discourages and prevents the relocation of production to countries outside the European Union to avoid environmental standards. This reduces the risk of climate change and enables the achievement of the European Union’s climate goals. By applying this instrument, the relocation of production to countries whose policies do not align with decarbonization policies is discouraged.
purpose of cbam report
Purpose and Audience of CBAM Reports
All companies exporting specific types of goods to the European Union market, as listed in the European Commission’s CBAM Regulation 2023/956, are required to apply CBAM.
These are all companies exporting products to the European Union market that are listed under the CN codes found in the annex of the CBAM regulation. All products listed under the CN codes are required to measure, calculate, and report on their GHG (greenhouse gas) emissions.
Companies that produce and sell products on this list are obligated to prepare, submit, and publish quarterly reports. The first quarterly report has a deadline of January 31, 2024, as the last date for submission. The period considered as the beginning of reporting is October 1, 2023. From that date until December 31, 2025, is treated as a trial period. The purpose of the trial period is to collect data and train for proper and efficient CBAM reporting from January 1, 2026. During the trial period, importers will only have reporting obligations. In this period, they are not obligated to pay financial adjustments nor are they required to undergo verification by an accredited body.
In addition to enabling their business partners in the EU to comply with the Carbon Border Adjustment Mechanism (CBAM) regulations by reporting on their emissions, exporters will also help themselves, as they will be able to gain insight into how the collection of cross-border CO2 taxes might affect the price of their products on the EU market and, consequently, their competitiveness. The obligation to pay the tax will begin to apply from January 1, 2026, and for every ton of CO2 emitted in the production of goods exported to the EU, a certain amount will have to be paid.
Regarding the costs involved, it is best illustrated by the fact that the current price of a ton of emitted CO2 in the EU is around 80 euros. Different industries have different emissions, so, for example, the production of one ton of steel generates 1.5 – 2 tons of CO2.
6 Manufacturing Activities
Areas of CBAM Reporting
In accordance with the provisions of European Commission Regulation 2023/956, the Carbon Border Adjustment Mechanism (CBAM), as an environmental protection instrument, is mandatory for six manufacturing activities.
report elements
Content of CBAM Reporting
The CBAM report must include data about the goods imported into the EU, the quantity of goods, carbon dioxide emissions, carbon pricing, the methodology for measuring and calculating emissions, and some other important parameters. These can be categorized into several basic categories, including:
- Goods imported into the European Union market
- Direct and indirect CO2 emissions
- Carbon pricing resulting from CO2 emissions
- Calculation and monitoring of CO2 emissions
Perspectives and Benefits of CBAM Reporting
CBAM reporting is mandatory at quarterly intervals, starting from January 31, 2023, as the deadline for submitting the first quarterly report. The trial period lasts until December 31, 2025. From January 1, 2026, this reporting will be rigorously controlled. From the very adoption of Regulation 2023/956, CBAM reporting has been an important instrument for environmental protection. A responsible approach to the environment, reducing pollution, and especially carbon emissions contribute to environmental protection and a healthier life. At the same time, this enhances the company’s reputation and opportunities for its progress and further development, as companies that do not adhere to ecological standards will be poorly regarded and subject to appropriate sanctions for environmentally irresponsible business practices.
In addition to implementing energy efficiency projects and using green energy in the company’s daily operations, your company, with CBAM reporting, is 90% environmentally responsible and environmentally friendly according to EU standards.
ESG reports
What is ESG?
This term refers to a set of standards that shape and guide business policies aligned with the concept of sustainable development. It relates to areas of environmental protection, social responsibility, and corporate governance. Certainly, considering the concept of sustainable development, the environmental segment, or ecological segment, is dominant. In line with the widely accepted green agenda, the success of business operations is increasingly viewed through the lens of environmental preservation and protection.
Business success is evaluated through aspects such as reducing the emission of harmful substances, primarily the reduction of carbon dioxide emissions, rationalizing the use of natural resources, using energy derived from renewable sources, increasing energy efficiency, and managing waste in a way that reduces waste volume while simultaneously increasing the recycling of waste materials.
Why is ESG important?
Elements of ESG Reporting
In the initial phase of creating ESG reports, there were no precise and sufficiently clear criteria for making reports, nor were standards prescribed based on which they would be made. With the popularization of these reports, standards for their creation have been introduced, and in 2023, the Corporate Sustainability Reporting Directive was adopted, which is being implemented in national legislations starting in May 2024. This directive replaces the Non-Financial Reporting Directive (NFRD), affecting the increase in the number of entities required to prepare ESG reports, expanding the content related to sustainability, and introducing European Sustainability Reporting Standards (ESRS). The European Sustainability Reporting Standards (ESRS) were published in April 2023, and the first reports prepared according to these standards will be published in 2025 and will contain data for the financial year 2024. The elements of ESG reporting cover the areas of environmental protection, social responsibility, and corporate governance, and these three areas are regulated by the European Sustainability Standards, which most comprehensively elaborate on environmental protection. The most commonly used segments or elements of ESG reports from these three areas are:
Environmental Area
- Energy efficiency
- CO2 and other harmful emissions
- Use of renewable energy sources
- Biodiversity sustainability
- Waste management
Governance Area
- Management structure
- Ownership structure
- Gender equality
- Anti-corruption practices
- Business ethics and culture
Social Responsibility Area
- Human rights and freedoms
- Employees' labor rights
- Personal data protection
- Diversity protection
- Occupational safety and health
why ESG reporting
Benefits of ESG Reporting
Modern society and environmentally conscious consumers increasingly prefer products and services from companies that adhere to ecological standards.
This is the primary reason why companies are creating ESG reports or planning to do so.
A responsible approach to the environment, reducing pollution, and increasing environmental awareness, along with a responsible attitude toward human resources, contribute to the advancement of companies and the simultaneous progress of society as a whole. This is one of the fundamental principles of sustainable development, which is becoming an imperative in modern society.
esg reporting trends
Perspectives of ESG Reporting in Modern Business
Modern trends indicate that companies with transparent ESG reports are being labeled and recognized as socially responsible, transparent, and desirable companies. These companies are recognized as those that meet ecological standards.
In this way, customers and service users show greater interest in their products and services. In addition, a benefit of this reporting is more favorable bank loans. Banks allocate significant amounts of money as loans under favorable conditions to companies recognized as environmentally friendly. One of the basic criteria for companies to be considered environmentally friendly is to have publicly disclosed ESG reports.
our team
Team for Creating ESG Strategies, ESG Reports, and CBAM Reports
The team that plans, designs, implements, and creates ESG strategies and reports consists of a group of highly educated professionals, experts in the fields of environmental protection, social and legal labor relations, and managerial corporate aspects of modern business. These are professionals with many years of work experience in corporate management tasks, who have, among other things, worked and continue to work on collecting, analyzing, and processing business data, creating action plans and projects in various business spheres, with an emphasis on the economic-financial, HR, legal, and management segments of corporations and other reputable business entities. Each team member has experience in independent work and project management, as well as in team activities in creating company projects in the field of economic and financial operations, organizational management activities, and structural development plans. Some individuals also have significant work experience and references in environmental protection and sustainable business practices.
Aleksandar Žigić
A Doctor of Law specializing in environmental protection, with extensive experience working on environmental protection projects and a decade of scientific research in sustainable development and ecology. Participated in the preparation and development of environmental protection projects. Simultaneously works as a lawyer, an expert in business, labor, and contract law, with significant experience and knowledge in administrative, civil, and contract law.
Vladimir Janković
Director of Innovation and Development at DFK International – Consulting and Auditing. An expert in introducing innovative technologies and procedures in modern business, with numerous specializations in corporate business and additional training in sustainable business practices. Educated as an economist and project management manager. He has over 10 years of work experience, the majority of which has been dedicated to project work.
Ljubomir Mijatović
Internal Auditor at DFK International – Consulting and Auditing. An expert in internal auditing and business improvement by introducing advanced business systems. Engaged in several significant projects in companies, introducing modern business systems for more profitable sustainable business operations, incorporating new management models that support constant growth and development of the company with maximum environmental protection and respect for social and societal aspects.
Nebojša Đukić
With long-term work experience as an economic-financial expert, having worked both independently and in workgroups on economic-financial analytics, collection, study, and analysis of economic-financial data for creating business policies and trends. Significant work experience in economic business improvement and accounting and auditing tasks.
Zoran Vidić
A graduate political scientist and journalist from the University of Belgrade, as well as a Master of Management from the University of Ottawa in Canada. Has extensive work experience in journalism, gathering information and data, processing, and publishing them. Has several years of experience as an analyst and data processor in international organizations, with 7 years of work experience at the OSCE as a data processing and publishing manager.
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