CBAM Reporting: 4 Key Takeaways from 2024

Ceri Linton

Senior Consultant

Contents

• 1. Awareness of CBAM remains varied
• 2. Supply chain collaboration is key
• 3. Digital solutions are essential
• 4. CBAM as a competitive advantage
• Contact us

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On the 31^st of October 2024, the EU Carbon Border Adjustment Mechanism (CBAM) reached another significant milestone. EU importers are now required to report the embedded emissions of their imports using primary data collected from their supply chain.

For many companies, CBAM continues to present a significant reporting challenge. With this first quarter of primary data reporting behind us, our team of CBAM experts has put together their top 4 learnings for businesses navigating the EU CBAM.

CBAM: 4 lessons for businesses

1. Awareness of CBAM remains varied

Awareness and understanding of CBAM monitoring and reporting processes vary significantly among both EU importers and non-EU manufacturers.

For companies importing to the EU, proactive communication and support for internal stakeholders and suppliers regarding CBAM’s purpose and processes is an essential step in ensuring timely and accurate compliance and avoiding potential penalties.

2. Supply chain collaboration is key

The EU CBAM requires businesses to work closely with their suppliers to gather accurate emissions data. Many importers found their suppliers were unprepared to provide emissions data in the detail required.

We have found that collaborating with suppliers on carbon accounting is not only beneficial but essential. Engaging suppliers in emissions-reduction initiatives and supporting them with resources for emissions tracking can help build a stronger, more resilient supply chain that aligns with CBAM’s objectives. Companies that invested in supplier engagement before the reporting period experienced fewer difficulties, underscoring the value of proactive partnerships in emissions reporting.

3. Digital solutions are essential

The complexity of CBAM reporting has highlighted the need for efficient digital solutions. Companies with global supply chains cannot depend on manual methods to collect and calculate embedded emissions data. This approach proves labour-intensive and prone to errors, especially for businesses with supply chains involving numerous emissions sources.

Digital platforms such as the Compliance Suite are rapidly emerging as essential tools. These platforms enable companies to automate data collection, calculate emissions accurately, and streamline reporting. The Compliance Suite coupled with the guidance from our team of CBAM experts provides our clients with the data and insights to strategically respond to the EU CBAM.

4. CBAM presents an opportunity for competitive advantage

Q3 2024 CBAM reporting highlighted the value of transparent communication and building trust between importers and suppliers. As CBAM evolves, transparent emissions reporting has become a differentiating factor, signalling a company’s commitment to sustainability.

However, manufacturers of CBAM goods must use this data to decarbonise, through alternative sourcing, sustainable production practices, and investing in cleaner technologies, to remain competitive and become more resilient to future CBAM costs.

The expectation of CBAM costs has caused some companies to increase the price of their products and others to remove them from the EU market. By proactively disclosing emissions data and reduction strategies and demonstrating the low carbon credentials of their products, companies can not only meet compliance requirements but also become the supplier of choice for EU importers.

Anthesis CBAM Guidance

Q3 2024 CBAM reporting provided invaluable insights into the operational realities of carbon accounting on a global scale. Companies have learned that high-quality data, strong supply chain partnerships, digital reporting solutions, and a proactive decarbonisation strategy, are essential for effective CBAM compliance.

Wherever you are in your CBAM journey, it is vital that you embrace the challenges presented by CBAM. The CBAM legislation and guidance are continually evolving, and with the support and advice from Anthesis, you’ll stay informed about the latest requirements and best practices.

For personalised support and insights, reach out to our team of CBAM experts.