NOTQIN — OT Track

CBAM Regulation

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CBAM — Carbon Border Adjustment Mechanism

EU regulation 2023/956 (the CBAM regulation) + implementing regulation 2023/1773 (transitional reporting) + the definitive-phase delegated acts due 2025–2026.

Status of this note. Stub v0 — Mouad expands in Wave H–I as part of WS-E CBAM/steel pack work.

What it is

A carbon tariff on imports into the EU of carbon-intensive goods. Importers pay for the embedded emissions of imported goods at the EU ETS carbon price. The intent is to prevent “carbon leakage” — EU industrials relocating to lower-regulation jurisdictions.

Covered sectors (Annex I)

  • Cement (clinker, cement, cement clinker, aluminous cement)
  • Iron & steel (most products)
  • Aluminium (raw + downstream)
  • Fertilizers (nitrogen-based, phosphate)
  • Hydrogen
  • Electricity

Downstream products (screws, bolts, certain finished steel/aluminium articles) included in Annex I scope.

Timeline

PhaseDatesWhat’s required
Transitional reporting2023-10-01 → 2025-12-31Quarterly emissions reports by importers · no financial obligation · default values allowed until 2025-07-31, actual data after
Definitive (fee) phase2026-01-01 onwardImporters buy CBAM certificates at EU-ETS-linked price · actual embedded-emissions data required · verified by accredited verifier
Free-allocation phase-out for EU industry2026 → 2034Free EU ETS allocations decline; CBAM scope expands in step

Embedded-emissions data required

Per shipment, importers must report:

  • Direct emissions of the production process
  • Indirect emissions (electricity used, from 2026 expanding)
  • Reporting per CN (Combined Nomenclature) code
  • Production route / installation identifier
  • Reference to actual data measurement OR justified default

Verification: by an accredited verifier (EU-recognised body, increasingly third-country bodies).

What this means for Moroccan exporters

  • Steel (YNNA Steel, Sonasid): direct CBAM exposure. Must produce verified embedded-emissions data per shipment to EU. Currently most don’t have the data infrastructure to do this granularly.
  • Cement (LafargeHolcim Maroc): direct exposure.
  • Fertilizer (OCP Group — phosphate-based): direct exposure for the fertilizer products in Annex I.
  • Downstream Annex I goods (steel parts, aluminium parts) — exposed.
  • NOT exposed (currently): textiles, leather, food, electronics assembly, automotive parts (most), unless they incorporate Annex I materials in scope.

The Moroccan-exporter problem. Importers will demand verified data. If a Moroccan plant can’t produce it, the importer either: (a) pays the default (worst-case) emissions value — passing cost back via lower prices, or (b) switches to a supplier who can provide verified data.

Either way, the Moroccan supplier loses margin.

How NOTQIN plays here

The wedge (§8.A traceability + §8.E energy of the Operating Thesis):

  1. Capture production-step-level energy + material flow data on the UNS.
  2. Compute embedded emissions per CN code per shipment automatically.
  3. Produce verifier-ready audit packs (raw data + computation + attestation trail).
  4. Host in-country per CNDP / DGSSI obligations.
  5. Price in MAD, deliver under Moroccan legal entity.

This is a real fundable wedge through 2026–2028 as the fee phase scales.

Open items for this note

  • Mouad: read regulation 2023/956 + 2023/1773 directly (not summaries). Note any open delegated acts that could change the data requirements.
  • Mouad: extract the data-fields-required-per-shipment list as a structured table — becomes the schema for the CBAM Agent module.
  • Confirm phosphate fertilizer scope precisely — OCP is too big an account to be vague.
  • Verifier-accreditation landscape in Morocco / North Africa — who can sign off? Or do we rely on EU bodies?
  • Cross-reference Carbon Compliance vault note to consolidate (this note = legal/regulatory; that one = operational/computational).

See also

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