ESG insights for Tax & Legal | January 2025
Welcome to our ESG Insights for Tax & Legal, keeping you informed of the latest developments in the fast-moving world of ESG!
This ESG Tax & Legal round-up features:
- CBAM | January 2025 deadline
- Updated ESG Tax Tracker
- Spotlight: Podcast Equal Pay & Pay Transparency
- Report: the move to mandatory reporting
- The Challenge of Greenwashing: an international regulatory overview
- Klimaatmaatregelen Belastingplan 2025 (in Dutch)
Enjoy the ESG Insights and please contact our ESG team for Tax and Legal, if you have any questions or feedback - we are happy to help you!
Merijn Betjes
1. CBAM | January 2025 deadline
A new year and CBAM will move forward. As you know, the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) came into effect on 1 October 2023, beginning with a transitional period that runs until 31 December 2025, during which importers’ obligations are limited to quarterly reporting obligations only, without paying any financial adjustment. The purpose of the transitional period is to collect data that will help fine-tune the shape of the CBAM for its definitive phase from 1 January 2026. Each importer, having imported CBAM goods into the customs territory of the EU during a given quarter of a calendar year must, for that quarter, submit a CBAM report containing information on the imported quantity of CBAM goods, and the direct and indirect emissions embedded contained therein.
Deadline Q4 2024 report
By the end of January 2025, the CBAM Q4 2024 report needs to be filed. We are happy to support. A CBAM report that has already been submitted may still be corrected until two months after the end of the reporting quarter. For Q4 2024, this is possible until two months after the end of Q4 (i.e. 28 February 2025). Furthermore, the reporting declarant may request, and provide justification for this request, to correct the CBAM report after this deadline. Declarants can do so by creating a request to the National Competent Authority (NCA) in the CBAM Transitional Registry (under the functionality “Requests”). The NCA will then assess that request and where appropriate allow the reporting declarant to resubmit a CBAM report or to correct it after the deadline. The resubmission of the corrected CBAM report or the correction, as applicable, shall then be made no later than a month following the approval by the competent authority. There is no limitation with respect to how often a report can be modified within the allowed time period.
From 1 January 2025, the only acceptable methodology for measuring emissions is the EU methodology, using either a calculation-based approach or a measurement-based approach. Note that next to the actual emissions data, more detailed information has to be provided on the level of the individual suppliers in a specific country of origin. Supplier communication and collaboration is absolutely vital for companies to report on actual embedded emissions. For transitional period CBAM reporting purposes, the following mandatory emissions data must be provided by suppliers:
- The direct and indirect embedded emissions either at installation level or production process level, including the applicable reporting methodology used to measure the emissions,
- The production method,
- The values of applicable specific parameters required for determining the embedded emissions (such as scrap usage; mass percentages or ratios; main reducing agents; purity; etc., depending on the CBAM product), and
- The specific embedded direct and indirect emissions of any relevant precursors if used in the production process.
To determine the total embedded direct and indirect emissions per tonne of CBAM good, installation boundaries, production processes and activity levels must all be defined. All inputs, outputs and corresponding emissions in an installation should be attributed to a production process, unless they relate to any non-CBAM good. In this regard, we want to note that it is important to submit a CBAM report on time, even when obtaining actual emission data has not been possible.
Register as an authorized declarant in 2025
Per 1 January 2026 a CBAM importer needs to be registered as an authorized declarant. Without this status there could be a risk imports aren’t allowed anymore. CBAM declarants will be able to apply for the authorized CBAM declarant status via the CBAM Declarants Portal as of 31 December 2024. The status of authorized CBAM declarant is granted upon request by the competent authority of the country of residence/establishment. The main conditions for obtaining the authorized CBAM declarant status are the following:
- The applicant is established in the Member State in which the application will be submitted;
- The applicant has an EU Economic Operator Registration and Identification (EORI) number;
- The applicant has not been involved in serious infringements of customs or tax law;
- The applicant can demonstrate financial and operational capacity to fulfill its obligations under the CBAM regulation. Applicants hereby need to meet the following criteria:
- The applicant is not be subject to bankruptcy proceedings
- The applicant is not in arrears with the payment of customs duties, taxes or charges which are collected on or in connection with the import of goods, financial regulatory obligations and all other duties related to its economic activity;
- The applicant demonstrates, on the basis of supporting documents provided together with the application, a sufficient financial standing to meet its obligations and fulfil commitments having regard to the type and volume of the economic activity performed by indicating the financial figures and any other financial information;
- The applicant has an administrative organisation suitable for fulfilment of the estimated obligations to surrender CBAM certificates, and has internal controls capable of preventing, detecting and correcting errors in CBAM declarations and CBAM certificates management, and of preventing and detecting illegal or any irregular transactions.
We recommend to start checking whether the above mentioned requirements are met. The application for the authorized declarant status should be done per relevant country (entity based). In principle, the competent authority will assess the application within 120 calendar days from the date of receipt of the application. This period may be extended by 30 working days if additional information is required. With respect to the Dutch NCA (NEa), they have requested to not file the application before 1 April 2025. In this respect, they have indicated that if you file the application between 1 April 2025 and ultimately 31 August 2025, you will certainly obtain a response in time, i.e. before 1 January 2026.
If there are any questions or support is needed, please contact one of the specialists listed at the right side of this page.
2. Updated ESG Tax Tracker
We have updated the ESG Tax Tracker. The ESG Tax Tracker, provides insight into the global ESG and Sustainability landscape for taxes, incentives and grants. The ESG Tax Tracker, which is regularly updated, is based on our global ESG Regulatory Database, covers more than 80 countries and leverages off our global network and ESG specialists. Should you wish to obtain information about a jurisdiction that does not appear in the database, please contact one of the specialists listed at the right side of this page.
3. Spotlight: Podcast Equal Pay & Pay Transparency
The EU has recently adopted a new directive regarding equal pay and pay transparency. What can companies do now to prepare? Listen to our podcast (in Dutch) where Ruben (Froger) discusses this topic with Tamara (van Mourik)!
Listen on Spotify or listen on Apple Podcasts.
4. Report: the move to mandatory reporting
Companies worldwide are preparing for the advent of mandatory reporting on sustainability, according to the 2024 edition of KPMG’s Survey of Sustainability Reporting. The report includes insights from KPMG member firms and draws on the expertise of KPMG subject matter specialists worldwide. Read more here.
5. The Challenge of Greenwashing: an international regulatory overview
As corporations around the world adopt ESG commitments publicly, there is the increasing demand from consumers, investors, regulators and the public for transparency and sustainable practices.
Throughout this report, we explore the risks that unsubstantiated and misleading sustainability information can trigger for both corporates and governments. Download the report here.
6. Klimaatmaatregelen Belastingplan 2025 (in Dutch)
Het Belastingplan 2025 introduceert een reeks fiscale klimaatmaatregelen die een nieuwe stap zetten in de vergroening van het belastingstelsel. Deze maatregelen zijn ontworpen om milieuvervuilend gedrag te beprijzen en milieuvriendelijk gedrag te stimuleren, met als doel de energietransitie te bevorderen en de belastingdruk te verschuiven van arbeid naar vervuiling en grondstofgebruik.
In dit artikel behandelt Merijn Betjes het belang van fiscale klimaatmaatregelen, de inhoud van het belastingplanpakket 2025 op het gebied van klimaat alsmede een terugblik naar maatregelen uit het belastingplanpakket 2024 die per 1 januari 2025 van kracht worden.
