Take the Guesswork Out of CBAM Reporting
Support CBAM requirements by identifying, managing, and reporting on the embedded emissions data from your supply chain. Centralize your emissions information, meet reporting requirements, and effectively respond to your customers’ demands.
Insights Into Your Carbon Emissions
CBAM is the EU’s new carbon tax on certain carbon-intensive imported goods. It is aimed at leveling the playing field between European and non-European producers, while supporting the EU’s climate goals. Companies importing goods into the EU will need to report on embedded emissions of in-scope goods, and eventually buy CBAM certificates (starting in 2026) to account for the carbon cost difference. This makes it less cost-effective to produce carbon-intensive goods abroad.
Starting July 31, 2024, CBAM requires importers to report emissions values with primary data from the manufacturing installations of in-scope products, instead of solely relying on estimates. This means companies need better supply chain transparency and stronger collaboration with suppliers to meet these requirements.
Bracing for CBAM’s Impact
CBAM targets importers bringing goods into the EU from high carbon emission sectors with a high risk of carbon leakage, including cement, iron and steel, aluminum, certain chemical industries (like fertilizers and hydrogen), and electricity.
The product scope covers goods listed in Annex I of the CBAM, identified by comparing the CN codes of imported products. But even if your organization isn’t directly importing these goods, CBAM still impacts you. Importers must gather embedded emissions data from the manufacturing locations of in-scope products. This means your customers may request your support in identifying and engaging the manufacturing installations to satisfy their reporting obligations.
With increasing pressure around CBAM compliance, staying informed and prepared is crucial.
Scoping CBAM Requirements
CBAM compliance can be daunting, from determining applicability to identifying relevant suppliers. Here are a couple of the challenges manufacturers face in scoping their requirements:
Understanding Relevance: The first hurdle is figuring out whether CBAM even applies to you. This can be tricky, especially for importers handling CBAM reporting and organizations receiving CBAM requests from their customers.
Identifying Relevant Suppliers: Once you know CBAM applies to you, the next step is to pinpoint which non-EU suppliers need to provide the necessary emissions data. This involves detailed supplier mapping and engagement.
Collecting Supply Chain Emissions Data
Once you’ve determined the relevance of CBAM to your operations and identified the relevant suppliers, the next step is to collect precise emissions data from your supply chain. Here are the key challenges:
- Often, importers don’t have direct access to this data
- Estimates won’t cut it — precise data is needed
- Importers rely on suppliers for this information, but since suppliers may not be directly affected, they need support to provide timely and accurate data
- Calculating embedded emissions is complex, and many suppliers don’t know how to provide the needed data
- Sometimes the direct supplier isn’t the manufacturer, requiring a cascade of requests through multiple tiers of the supply chain
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