With the Carbon Border Adjustment Mechanism (CBAM), the European Union (EU) is introducing a new system to reduce emissions from imported goods. Companies in the EU that import products such as iron, steel, cement, aluminum, and fertilizers from non-EU countries must submit CBAM reports from 2024 and document the emissions of the delivered goods. For companies, this means they must work closely with their suppliers outside the EU to capture the required emission data.

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Since many non-EU suppliers may not yet be familiar with CBAM regulations, structured training can be helpful. In our whitepaper "CBAM: The 4-Step Guide for Your Suppliers of CBAM Goods," we present a guide that serves as training material for your suppliers and ensures that all stakeholders are familiar with CBAM requirements.

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The 4-Step Guide to CBAM Compliance

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1. Defining Process Boundaries and Reporting Periods

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To capture accurate emission data, suppliers must define the specific boundaries of their production processes and establish the reporting period. Documentation includes the identification of production processes and a clear distinction between direct and indirect emissions generated during the production process. The recommended reporting period is the calendar year, but alternative periods, such as the fiscal year, are also possible, provided they comply with CBAM requirements.

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2. Determining the Emission Monitoring Method

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Suppliers can choose between different monitoring methods:

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• Calculation-based method: Emissions are calculated based on the materials and fuels consumed using established emission factors.
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• Measurement-based method: The concentration of greenhouse gases and the exhaust gas flow are measured directly.

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The choice of method depends on the conditions of the production facility and CBAM requirements. For some production areas, such as primary aluminum production, specific methods are prescribed. More details in the whitepaper.

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3. Collecting and Documenting All Relevant Parameters

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Collecting all necessary data is crucial for accurate reporting. This includes monitoring direct emissions, heat consumption, and indirect emissions generated by electricity use. Suppliers must ensure that all parameters, such as the specific emission factor for electricity and emissions from precursors, are captured and documented.

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4. Communicating Emission Data to EU Importers

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The collected emission data must be transmitted in a standardized format to EU importers who submit the CBAM reports. The European Commission provides a template for this purpose that facilitates the exchange and supports compliance with reporting obligations.

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Given the likelihood that suppliers outside the EU may not yet be familiar with CBAM regulations, it is advisable for affected companies to proactively share information and implement training-like measures at an early stage.

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Support from Tacto for Efficient CBAM Compliance

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To meet CBAM requirements, companies can use Tacto to facilitate communication and data collection with non-EU suppliers. Tacto offers a structured solution that enables automated data collection and tracking, allowing companies to comprehensively monitor their supply chain and reliably document all CBAM-relevant information.

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In the whitepaper "CBAM: The 4-Step Guide for Your Suppliers of CBAM Goods", we present a detailed 4-step guide that you can forward directly to your CBAM-relevant suppliers. This serves as initial training material to ensure that all stakeholders are familiar with CBAM requirements. The guide is written in English, as it is intended for suppliers outside the EU.

Given the likelihood that suppliers outside the EU may not yet be familiar with CBAM regulations, it is advisable for affected companies to proactively share information and implement training-like measures at an early stage.