A recent British Chambers of Commerce (BCC) survey of 700 UK firms has revealed that the majority of businesses are unaware and unprepared for upcoming changes to exporting goods to the European Union (EU).
With some of the earliest changes being introduced from October, businesses who trade with the EU could find that their goods face delays, unexpected costs and compliance issues if they aren’t familiar with the new requirements.
Our trade team keep up to date with the latest developments, policies and announcements affecting importers and exporters to help businesses keep goods moving and ensure compliance at every stage.
Here, the team share what businesses need to know about the upcoming export changes.
The Carbon Border Adjustment Mechanism
The Carbon Border Adjustment Mechanism (CBAM) aims to tackle climate change and encourage businesses that trade with the EU to be more sustainable. It is part of the EU’s plan to reduce greenhouse gas emissions by 55% by 2030 and meet its 2050 target for carbon neutrality.
CBAM puts a price on the carbon emitted during the production of carbon intensive goods. Businesses will need to purchase certificates, which are valid for two years, corresponding to the emissions generated in production to export their goods to the EU and report their emissions quarterly.
From 1 October 2023, CBAM begins a transitional phase for certain goods exports, with the first quarterly reporting period ending 31 January 2024. This phase covers goods such as aluminium, cement, electricity, fertilisers, hydrogen, iron and steel whose production is deemed to be carbon intensive and at most significant risk of carbon leakage. CBAM will be extended to other goods and is expected to be fully implemented from 2026.
Earlier this year the UK government’s Department for Business & Trade announced an indefinite extension, beyond December 2024, of the Conformité Européenne (CE) marking for goods being placed on the market in Great Britain.
While this primarily affects businesses who trade domestically, it is important for exporters to be up to date and familiar with the latest regulations. The BCC’s survey revealed that 43% of manufacturers are still unaware of the UK’s voluntary, alternative product safety marking system: the UKCA (UK Conformity Assessed) marking for goods on the market in Great Britain and the separate UKNI marking for those in Northern Ireland. The UKCA and UKNI markings are expected to be implemented from the start of 2025.
The CE marking is still required for goods being exported to countries in the EU.
New VAT requirements
From 1 January 2025, the EU will be making changes to VAT requirements for cross-border transactions. These will include changes to place of supply, single VAT registration, domestic reverse charges and call-off stock simplification rules.
Additionally, and in line with other customs and tax systems which have become digitised, e-invoicing and digital reporting requirements will come into effect for the EU from the start of 2028 as part of its VAT in the Digital Age package.