How does CBAM work

Understanding Carbon Border Adjustment Mechanism

The Carbon Border Adjustment Mechanism (CBAM) is a ground-breaking initiative by the European Union (EU) to tackle carbon leakage and promote cleaner industrial production globally. With its ambitious aim to achieve climate neutrality by 2050, the CBAM imposes a carbon price on imported goods based on their carbon emissions, incentivising domestic and international producers to reduce their carbon footprint. Its implementation began in May 2023.

Two-Phases from Carbon Assessment to Global Compliance

The Carbon Border Adjustment Mechanism (CBAM) unfolds through a diligent two-phase approach. Initially, the focus is on precise assessment and pricing of carbon content in carbon-intensive goods like cement and fertilisers, requiring comprehensive data on energy consumption and emissions from the production process. This phase aims to incentivize cleaner production methods by assigning a carbon price to the goods, underpinned by guidelines ensuring a transparent evaluation process.

Transitioning into the implementation phase, CBAM mandates importers of such goods to report emissions and purchase carbon allowances equivalent to their products’ carbon content, aligning the costs with the EU’s Emissions Trading System (ETS) pricing. This ensures a fair distribution of carbon pricing burdens between local and international producers, mitigating carbon leakage.

Compliance is pivotal, enforced through strict monitoring mechanisms including documentation inspection and emissions data verification. Non-compliance may attract penalties, impacting business operations within the EU market. Over the long haul, adherence to CBAM policies is suggested to promote not only emissions reduction but also sustainable growth and fair global competition.

Phase 1: Assessment and Pricing

In the initial phase of implementing the Carbon Border Adjustment Mechanism (CBAM), we focus on assessing and pricing carbon emissions related to imported goods from non-EU countries. The primary objective is to establish a fair price for the carbon emitted during the production of carbon-intensive goods entering the EU while encouraging cleaner industrial production in non-EU countries

To effectively assess and price the carbon emissions, we examine imported goods’ embedded carbon content, which reflects the total greenhouse gas emissions generated during the production process. By accurately measuring embedded carbon content, we can establish a charge that properly represents the product’s environmental impact and aligns it with our domestic goods’ charges.

One of the main challenges in this phase is to identify and track relevant data for accurate assessment. Legislators collaborate with various stakeholders to gather and verify the necessary information, ensuring the entire process adheres to established standards and transparency requirements.

During the implementation, we acknowledge the potential effects on businesses. The transition towards full implementation in 2027 demands close coordination with trade partners and third countries, keeping their interests in mind.

In conclusion, the assessment and pricing phase is essential in laying a solid foundation for the EU’s CBAM. By developing a robust mechanism for accurately measuring and pricing carbon emissions, the EU strives to create a fair and sustainable market that benefits our environment and sets an example for global climate action.

Phase 2: Final Implementation

Phase 2 of the Carbon Border Adjustment Mechanism (CBAM) marks the transition to its full implementation. This phase, starting in 2027, represents a critical juncture in the EU’s strategy to combat carbon leakage and foster a sustainable trade environment.

A key feature of Phase 2 is the introduction of CBAM certificates. These certificates are instrumental in quantifying and managing the carbon emissions associated with imported goods. Businesses will be required to purchase CBAM certificates, correlating to the amount of carbon emissions their imported goods are responsible for. This approach not only ensures a fair and level playing field between domestic and imported products but also incentivizes producers outside the EU to adopt cleaner production methods.

The focus during this phase will be on ensuring seamless integration and compliance with the CBAM regulations. It involves close collaboration with international trade partners and third countries to adapt to these new requirements. The EU is committed to providing guidance and support to businesses and stakeholders during this transition, ensuring a balanced approach that respects the interests of all parties involved.

In essence, Phase 2 of CBAM is a pivotal step towards a more sustainable future. It not only aims to mitigate environmental impact but also strives to encourage global adoption of greener production practices. As we move forward, the EU continues to lead the way in innovative climate action, setting a precedent for environmental responsibility in global trade.

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As CBAM unfolds, staying updated with its evolving landscape is crucial for businesses to ensure compliance and strategically position themselves in the market. To aid in this endeavor, we invite you to subscribe to our newsletter. Our seasoned specialists will meticulously curate the most pertinent news and announcements regarding CBAM, delivering them straight to your inbox.

What is Carbon Border Adjustment Mechanism – Understanding CBAM

In this guide series, we explore the details of CBAM, exploring its definition, objectives, and its pivotal role in merging climate change policies with global trade dynamics. As you navigate through, you’ll grasp the mechanism’s operational framework, from the initial assessment and pricing of carbon emissions in imported goods to the strict compliance requirements in the implementation phase. The guide reveals the key components of the CBAM agreement, shedding light on the tariff structure, revenue allocation, compliance mechanisms, and much more. With this key information you will have a holistic view of the mechanism’s impact on the EU’s trade relations and its broader implications on the global effort to combat climate change.

What is Carbon Border Adjustment Mechanism – Understanding CBAM

Definition and Objectives of CBAM

The Carbon Border Adjustment Mechanism (CBAM) is an innovative mechanism introduced by the European Union (EU) to address the challenges of climate change and carbon emissions. CBAM aims to put a fair price on carbon emissions generated during the production of specific goods imported into the EU and promote cleaner industrial production in non-EU countries. This mechanism is designed to address the issue of carbon leakage, which occurs when companies move their production to countries with lower emissions standards, leading to an increase in global emissions levels.

One of the primary objectives of CBAM is to ensure that industries within the EU and importing goods into the EU face the same carbon costs. As a result, the EU intends to level the playing field for businesses and avoid the risk of carbon leakage while encouraging cleaner production worldwide.

Significance in the climate change and global trade arena

CBAM plays a crucial role in the context of climate change and global trade. By putting a price on carbon emissions, the mechanism incentivises industries to adopt cleaner and more sustainable production methods, thus contributing to the broader global effort to combat climate change. Furthermore, CBAM sends a strong signal to trading partners that the EU is serious about acting on emissions and encourages them to adopt similar measures to decarbonise their industries.

In the global trade arena, CBAM has sparked debate about whether it is compatible with international trade rules. The mechanism may potentially lead to trade disputes, as some countries argue that it is a form of protectionism. However, the EU maintains that CBAM is designed to promote a level playing field for businesses and is in line with World Trade Organisation rules.

Overall, the Carbon Border Adjustment Mechanism is an important tool in the EU’s efforts to reduce carbon emissions and promote a sustainable global economy. As the mechanism is implemented, businesses must adapt to these new regulations and ensure compliance with CBAM requirements.

Stay updated with the latest on CBAM!

In the fast-paced world of e-commerce, the role of logistics has never been more crucial.
That’s why we compiled this e-book as a fully comprehensive guide to understanding the pivotal role that logistics plays in the success of e-commerce businesses. Whether you’re a small startup or a medium-sized enterprise, the challenges of the industry are numerous. But fear not, for this e-book will show you how to navigate these challenges and how to thrive with the support of your professional logistics partner.

The following guide will explain the critical role of logistics in e-commerce, break down the challenges faced by small and medium-sized e-commerce companies, outline ways to deal with them, and show you how to choose the best logistics partners.

Enjoy your reading!

In today’s rapidly evolving global marketplace, the role of technology cannot be overstated, and the freight forwarding industry in the United Kingdom is no exception. With the increasing complexity of supply chains and the demand for faster, more efficient transportation of goods, technology is playing a pivotal role in modernising the freight forwarding sector.

Predictions for the Future

As we move further into the 21st century, several key predictions point to significant changes in the freight forwarding industry in the UK.

Automation and AI Integration
Automation and artificial intelligence will play a central role in streamlining operations. Predictive analytics, machine learning, and robotic process automation will help freight forwarders make more informed decisions and reduce human error.

Enhanced Visibility
Real-time tracking and visibility of shipments will become the norm. Blockchain and IoT (Internet of Things) technology will be used to create an end-to-end digital trail, enabling stakeholders to monitor the location and status of cargo throughout the supply chain.

Eco-Friendly Initiatives
The freight industry is under increasing pressure to reduce its environmental footprint. Green technology and innovations, such as electric and autonomous vehicles, will become more prevalent as the industry works towards sustainable logistics solutions.

Customer-Centric Approach
Freight forwarders will focus on delivering an improved customer experience through user-friendly platforms and digital tools. This shift will necessitate a more personalised and agile approach to meet the diverse needs of clients.

Collaborative Ecosystems
Industry players will increasingly work together to create interconnected ecosystems. This collaboration can streamline operations, reduce costs, and enhance the overall efficiency of the freight forwarding process.

Addressing Pain Points in Freight Forwarding

The UK freight forwarding industry faces several pain points, many of which technology can effectively address.

Complex Documentation
Freight forwarding involves a multitude of documents and paperwork, making it a highly administrative process. Automation and digitalisation can significantly reduce the time and effort required for document management. By implementing document management systems it can simplify and expedite the documentation process.

Inefficient Communication
The reliance on traditional communication methods can lead to delays and miscommunication. Technology offers more efficient and real-time communication channels, improving collaboration among stakeholders. Implementing modern communication tools can ensure seamless communication with clients and partners.

Inaccurate Tracking
Without advanced tracking and visibility solutions, it’s challenging to provide customers with accurate information on their shipments. Modern technology can enable precise tracking, reducing uncertainty and improving customer satisfaction. Access to cutting-edge tracking technology ensures that clients have real-time access to the location and status of their shipments.

Risk Management
Freight forwarding is fraught with potential risks, from weather-related delays to geopolitical issues. Advanced analytics and predictive tools can help freight forwarders better anticipate and manage these risks. Conducting risk assessment and mitigation strategies can proactively address potential disruptions.

Lack of Transparency
The lack of transparency in the supply chain can lead to disputes and inefficiencies. Technologies like blockchain can create a transparent and immutable record of all transactions, increasing trust and accountability. The implementation of blockchain technology can enhance transparency and accountability in its operations.

Benefits of Modernisation with Ziegler

The adoption of technology in freight forwarding promises numerous benefits to the industry, its stakeholders, and the wider economy, with Ziegler leading the way:

Ziegler’s modernisation methods, including automation and digitalisation, streamline processes which reduce manual effort and enhance overall efficiency. Tasks that once took days can now be completed in hours, benefiting both us and our clients. By automating routine tasks and eliminating paperwork, we are able to significantly reduce our operational costs. Moreover, better data analytics enable us to optimise routes and reduce fuel consumption, further driving down expenses. Enhanced visibility and communication tools enable us to provide real-time information to our clients. This not only builds trust but also allows us to proactively address issues and concerns, resulting in higher satisfaction amongst our customers. Technology-driven predictive analytics and risk management tools allow us to identify potential issues and take preventive measures, reducing the chances of costly disruptions and disputes. We’re also heavily committed to environmental responsibility through investment in eco-friendly technologies such as electric vehicles and sustainable shipping practices, contributing towards a more sustainable and eco-conscious industry.

Our modernisation methods leverage the wealth of data generated to provide valuable insights for making more informed decisions, optimizing operations, and identifying opportunities for growth. A collaborative approach, which forms a critical part of their modernisation strategy, ensures better coordination and communication among various stakeholders in the supply chain, resulting in a smoother, more efficient movement of goods. Our early adoption of technology and modernisation methods positions us as industry leaders, offering superior services, faster delivery times, and more competitive pricing, attracting a larger client base. The future of UK freight forwarding is intricately tied to modernisation through technology. As the industry continues to evolve, Ziegler are not only embracing technology but leading the way in shaping the industry’s future. The adoption of technology addresses pain points, provides numerous benefits, and positions us for success in the dynamic world of global logistics. Modernisation is not just an option, it is a necessity.

Groupage transport, simply known as groupage, defines a special type of transport consisting in grouping together goods dispatched by several different companies into a same load. In international trade, the abbreviation LTT (Less Than Truckload) is frequently used, referring to groupage transport. “Consolidation” is another term used.

In practice, groupage transport comes into play when a company wishing to dispatch goods does not have a large enough volume to fill a truck, container, etc. For those companies, transporters specialised in groupage can offer to share any space remaining in their truck between several senders.

For companies resorting to this type of transport to dispatch their goods, groupage offers several advantages. It enables them to save money on transport. By opting for groupage transport, the company shares all transport costs with the other senders. It no longer has to pay all the delivery fees, as its merchandise only occupies part of the space available in the truck. Groupage offers companies an easier option for sending their merchandise to different destinations, without having to worry about the volume of goods dedicated to each destination. Groupage transport improves service quality for companies, as they benefit from numerous services via their providers (such as a wider variety of itineraries).

This being said, groupage transport requires more flexibility from senders regarding the products’ loading and delivery times. The transporter must first run a pick-up route to collect all the goods before delivering them all, whereas full-truck transport would simply consist in shipping one type of merchandise from a point A to a point B.

In the world of product shipment, groupage positions itself halfway between standard delivery services (a solution often too expensive or poorly-suited to the dispatched goods’ features) and more standard full truck load transport.

Specificities of groupage transport

Groupage transport is particularly recommended for dispatching goods when:

The volume of goods to dispatch is not big enough to fill a full truck load;
Dispatch deadlines are not a key criterion (groupage delivery is considerably longer than standard delivery, as it requires several deliveries to be grouped together);
The dispatched goods are aimed for delivery in different countries;
The goods dispatched can easily be combined onto one or several pallets.

Examples and practical applications

A company specialised in the manufacture of carpet rugs wishes to export its production to several countries. It can thus choose between several transport options – that are more or less expensive. To avoid major transport expenses, the company’s best option would be not to pay transport “for nothing” (with part of the load empty). When the volume it wishes to send out is smaller than the total loading volume available in a means of transport, it can turn to groupage.

To do so, the company must follow several set stages:

Searching for and selecting a provider specialised in groupage transport;
Communicating the features of the goods to be shipped (type of product, weight, volume, etc.);
Communicating the location of loading and unloading sites.

As for the transporter, it will make sure to group together shipments to joint destinations, whilst optimizing the space available in the truck. It will then provide the company in question with the goods’ loading and delivery dates.

Other applications offered – ETSF

An ETSF is an external temporary storage facility. ETSF’s are often located further inland away from the port or frontier. RoRo (Roll-on Roll-off) or groupage traffic can exit the port quickly and the customs declarations can be conducted at the ETSF avoiding unnecessary delays.

When off loading an ETSF trailer it is placed 3ft from the bay where full trailer and seal checks are performed. If the load after the GMR check places the trailer on ‘Customs Hold’ our onsite Customs are informed of this update. The warehouse will wait until customs confirm it is ok to proceed with unloading the trailer.

The trailer/ goods are treated with the same process as above but difference on these labels are will be a UCN number on the label which will be unique solely to that pallet. There can never be a non-labelled pallet in the ETSF area as this breaks customs rule.

In some instances there can be a short break where a pallet(s) will be placed in the stow unlabelled due to the quantity of that stock on the trailer. For example, if a stock line has 500 cartons on the loads it would produce 500 labels. The operator will therefore wait for the warehouse to advise how many pallets the 500 cartons we’re placed on and then complete the labels accordingly. All of these labels will have the same UCN number.

Once the warehouse completed the emptying of the trailer, all checked and labelled. Goods are placed into a stow in the ETSF area and recorded.

Why would operators choose to use an ETSF?

Many operators are choosing to move clearances away from the border to their own inland facilities – an ETSF (external temporary storage facility). The approval process for these sites requires an Inventory System to be in place. The Pentant ETSF system is uniquely truck-based, and a good fit for these operators.

Selecting the appropriate maritime freight forwarder holds immense significance for businesses engaged in global operations. Managing the seamless import and export of commodities through sea routes entails intricacies, underscoring the significance of evaluating various aspects while opting for the most suitable forwarder for your enterprise.

What is the role of a freight forwarder?
What type of forwarder should you choose?
How to identify a good maritime service provider?
What services should they offer?

Discover comprehensive insights on these and related topics in our e-book.

In the heart of one of the most influential logistic hubs in The Netherlands lies Venlo, a city strategically positioned on the Dutch-German border. Boasting a prime location merely 150 kilometres away from the bustling ports of Rotterdam and Antwerp, and in close proximity to the industrial powerhouse of the German Ruhr Area, Venlo is a logistical gem. At the epicentre of this dynamic setting, Ziegler Nederlands stands tall, offering state-of-the-art warehousing facilities that epitomise modern logistics.

Strategic Location for Unrivalled Connectivity

Nestled at the crossroads of the A73 and A67 motorways, Ziegler Nederlands warehouses enjoy unparalleled connectivity. These major motorways not only provide seamless access to key European cities but also facilitate the swift movement of goods within the continent. Further enhancing its logistical process, the facilities are well-linked to train and barge terminals, harnessing multiple modes of transportation for efficient cargo handling.

Warehousing Excellence

Ziegler Nederlands warehouses are far from ordinary; they are equipped with cutting-edge technology and designed to accommodate a diverse range of cargo. Whether your valuable merchandise requires storage within the European Union or under customs bond, these facilities provide a secure and adaptable environment.

A Legacy of Excellence: Ziegler Group

As a proud member of the Ziegler Group, a 100% family-owned entity with a heritage dating back to 1908, Ziegler Nederlands exemplifies decades of logistics expertise. From air and ocean freight solutions that span the world to an expansive Pan-European road freight and parcel network, Ziegler Group is synonymous with seamless global connectivity.

Beyond Logistics: Comprehensive Services

Ziegler Nederlands offers more than just logistical solutions; it provides a holistic partnership to help your business flourish. The array of services includes unique customs solutions encompassing consultancy, clearance, and fiscal representation. This ensures that the complexities of customs regulations are navigated with precision, facilitating the smooth movement of your goods. In addition, the Picking & Packing and Value Added Services elevate your logistics experience, adding value to every step of the supply chain.

Empowering Your Growth

Ziegler isn’t merely a logistics provider; it’s your growth partner. With a commitment to excellence that spans generations and a suite of services designed to meet every logistical challenge, Ziegler empowers businesses to reach new heights. By embracing innovation, embracing technology, and leveraging a strategic location, Ziegler stands ready to amplify your success.

Connect with Ziegler Nederlands

To explore our services and embark on a journey of logistics excellence, reach out to us using the form below.

Low Emission Zones (LEZs) were created as a policy response to address the issue of air pollution and reduce emissions from vehicles in urban areas. These zones are geographic areas where certain vehicles that produce high levels of pollutants are either restricted or charged a fee to enter. The goal is to encourage the use of cleaner vehicles and improve air quality in densely populated regions.

The first official Low Emission Zone was introduced in London, in 2008. After London’s success, other European cities followed suit. Each city set its own criteria for restricted vehicles, emission standards, and charging schemes. Over time the concept of Low Emission Zones has expanded beyond Europe and the emission standards and criteria for vehicles allowed in these zones have become stricter.

In response to these progressive measures and other environmental challenges, Ziegler Group swiftly implemented various initiatives and studies. Their goal was to not only comply with the evolving regulations but also to proactively develop customised, flexible solutions for their clients, making their supply chains resilient, cost-effective, and environmentally friendly.

The Challenge of Embracing Green Transportation

Amid the growing awareness of environmental concerns and the introduction of regulatory frameworks, the transportation industry faces significant hurdles in transitioning to greener practices. As cities implement traffic limits and low-emission zones, logistics companies like Ziegler must find innovative ways to adapt their operations while meeting the unique requirements of each client.

Ziegler is Pioneering Solutions for Sustainable Logistics

Customised Green Fleet Initiatives

Ziegler Group understands the critical role of our vehicle fleet in achieving sustainable logistics. To align with the environmental regulations, we embarked on an ambitious “greening” project. Currently, 93% of Ziegler’s heavy vehicle fleet complies with Euro 5 and Euro 6 emission standards, significantly reducing our carbon footprint.

Ziegler also actively participates in the research for using of heavy electric vehicles, exploring alternative fuel options like B100, HVO, and XTL. This commitment ensures that our fleet continues to evolve towards greater sustainability.

Innovative Last-Mile Delivery Options

Recognizing that last-mile delivery contributes significantly to emissions, Ziegler introduced two cutting-edge solutions. “Cargo Bike by Ziegler” presents a unique approach to package and pallet delivery, utilising bicycles with covered trailers to navigate narrow and restricted city streets while emitting zero CO2.

Additionally, Ziegler is spearheading the development of autonomous, electric delivery vehicles. This self-driving and cabinless vehicle has the potential to revolutionise last-mile delivery, providing efficient and eco-friendly alternatives for urban areas.

Smart Technology for Environmental Compliance

To achieve greater environmental compliance, Ziegler leverages smart technology solutions. Automated delivery route optimization systems employ advanced algorithms to minimise delivery distances and maximise the number of customers served per vehicle, reducing fuel consumption and emissions.

Advancing Multimodal Transportation

Ziegler actively integrates multimodal transportation as a greener approach to meet the evolving demands of metropolitan areas. Emphasising eco-friendly options like train-based logistics or inland waterway freight, we strive to create more sustainable supply chain solutions.

Ziegler Group’s Unique and Flexible Approach

Ziegler Group stands out by delivering tailored solutions to address each client’s unique requirements. Our proactive response to the environmental challenges ensures that we not only comply with regulations but also help our clients thrive in a greener landscape. By stabilising supply chains, reducing costs, and fostering resilience, Ziegler enables our clients to embrace a sustainable future with confidence.

With the rise of omnichannel shopping, last mile delivery has become more complex and important. It’s not just about delivering products from a warehouse to a home or business anymore. Supply chains have to move in new directions and be agile enough to adapt quickly to different delivery methods.

Last mile deliveries are:

Crucial: Although this is the final stage of product delivery, and after the goods have already undergone a long and multi-stage process, last mile delivery is the point that is most crucial for customer satisfaction. It is at this stage that the customer is most affected by the transport process.

Complicated: It is also the most complicated stage, as the final leg of shipment typically involves multiple stops with low drop sizes.

Expensive: It’s also the most expensive stage. As a share of the total cost of shipping, last mile delivery costs are substantial comprising 53% overall.

Problematic: Last-mile deliveries are also the biggest source of urban pollution, noise and congestion. For example, in Brussels alone around 16,000 trucks and 26,000 vans enter the city centre every day.

Supply chain professionals are under pressure due to high customer expectations, cost management, environmental concerns, port congestion, inflation, and restrictions in urban areas. Additionally, challenges arising from the recent pandemic, geopolitical tensions, social conflicts, and labour shortages exacerbate these constraints.

We know the challenges of last mile deliveries very well! That’s why we’ve prepared this guide providing insights into new market trends and solutions to help brands navigate these challenges and efficiently ship products worldwide.

It’s not a secret that transportation is one of the biggest sources of greenhouse gas emissions in the world. Almost everything we consume or use had to be delivered to us. 80% of all the stuff we buy and sell around the world gets shipped by sea, that’s why sea transport, in particular, has a big role to play in reducing emissions.

But the good news is that we can make a difference. And it’s not just up to the carriers – it’s up to all of us as consumers too. We need to start thinking about the environmental impact of the products we buy and demand that companies do the same.

Companies that take the environment seriously will be more competitive in the long run and we’re proud to be part of this process and help our clients navigate through it.

Based on our 60 years of experience and expertise in sea freight management we’ve put together an e-book to help you navigate through this ever-changing and sometimes challenging environmental revolution.

Get ready to join us on this thrilling journey!