On January 17, our Tax Committee organized a meeting centered around the key challenges and considerations of the Extended Producer Responsibility (EPR) and the Carbon Border Adjustment Mechanism (CBAM).
The online roundtable discussion featured seasoned experts, Bence Barta (Andersen), Erzsébet Blahunka (Continental Automotive) and Balázs Buzási (Robert Bosch Kft.) and Károly Radnai (Andersen), Chair of AmCham’s Tax Committee, moderator of the event.
For EPR, participants delved into the challenges posed by the new system as well as the relation of EPR and the environmental product fee, which has been with us in the past two and a half decades.
The difficulties in planning, budget strains, and the late release of legislation were identified as the prominent challenges of EPR that companies had to face. Additionally, insights were shared on EPR optimization options and experiences in data reporting. Questions about how EPR rates affect the country's ability to compete effectively in the production of goods, thus Hungary’s competitiveness were also raised.
Regarding CBAM, it was noted that companies importing CBAM goods (cement, steel and iron, fertilizers, aluminum, hydrogen, and electricity) in Q4 2023 are obliged to submit the first report by 31 January 2024.
The primary objective of the EU with this measure is to combat carbon leakage, underscoring its significance in environmental policy. Delving into the dialogue, experts noted similarities in challenges with EPR, notably the rapid implementation coupled with the need for more available information. The complexity of data reporting in CBAM was also underlined, given its dependence on supply chain information to be obtained externally. Discussions also involved the nuanced classification of CBAM concerning its similarity or divergence from conventional taxes. It was further mentioned that while CBAM currently applies to raw materials, there exists a potential for its extension to cover a more extensive array of products, sparking inquiries into the evolving scope and potential consequence for businesses.