CBAM The Ripple Effect of CBAM on Global Supply Chains The European Union's Carbon Border Adjustment Mechanism (CBAM) has the influence to reshape global supply chains, with significant implications for businesses operating across borders. As a key component of the EU's broader climate strategy, CBAM aims to prevent carbon leakage and promote global decarbonization. For companies sourcing or exporting goods, understanding CBAM’s ripple effects is essential for maintaining competitive and resilient supply chains. CBAM in Context In brief, CBAM imposes a carbon price on certain imports into the EU, ensuring that products subject to less stringent climate regulations abroad do not undermine the EU’s climate goals. Targeting carbon-intensive sectors such as steel, cement, and electricity, CBAM levels the playing field between EU producers and their international competitors. Direct Impacts of CBAM on Global Supply Chains CBAM’s implementation brings about immediate and tangible effects on global supply chains. For non-EU exporters, the most obvious impact is the increase in costs. As CBAM imposes a carbon tax on imports based on their embedded carbon emissions, industries with high carbon footprints—like aluminum, fertilizers, and electricity—will face significantly higher costs when exporting to the EU. This increase is likely to be passed down the supply chain, raising prices for end consumers and potentially altering demand patterns. Moreover, CBAM is forcing companies to rethink their sourcing strategies and supplier relationships. Businesses reliant on carbon-intensive imports may start seeking suppliers with lower carbon footprints to avoid CBAM-related costs. This shift can be particularly challenging for industries deeply entrenched in global supply networks, where switching suppliers isn't as simple as it sounds. Already, some companies are exploring options to relocate production closer to end markets or investing in cleaner technologies to mitigate CBAM’s financial impact. Indirect Consequences on Global Trade Beyond the direct financial implications, CBAM is likely to trigger a series of indirect effects on global trade. One of the most significant concerns is its impact on trade competitiveness. CBAM could effectively level the playing field between EU companies, which are already subject to stringent carbon regulations, and their non-EU counterparts. However, this might provoke retaliatory measures from non-EU countries, who could impose their own trade barriers or carbon tariffs, potentially leading to trade disputes. On the flip side, CBAM could serve as a catalyst for global decarbonization efforts. By putting a price on carbon emissions, CBAM encourages companies worldwide to adopt greener practices and technologies. This ripple effect might push other regions to implement similar mechanisms, fostering a global shift toward more sustainable trade practices. While this transition may be bumpy, the long-term benefits of a lower-carbon global economy could outweigh the initial disruptions. Strategic Adjustments for Businesses For businesses affected by CBAM's complexities, ensuring ESG compliance is essential. Companies must prioritize transparency in carbon footprint reporting and ensure their entire supply chain aligns with CBAM requirements. This could involve investing in better carbon tracking technologies or working with suppliers to reduce emissions at every stage. Rethinking supply chain resilience is another key strategy. As CBAM reshapes global trade, businesses need to adapt to mitigate risks. This might mean diversifying suppliers, exploring new markets, or relocating production closer to consumers. For example, a company relying on high-carbon steel from non-EU countries might switch to lower-carbon alternatives within the EU, reducing CBAM liabilities. The Future Outlook for Global Supply Chains Looking ahead, CBAM could have a profound impact on global supply chains. As it becomes fully operational, trade patterns may shift. Companies are likely to prioritize low-carbon suppliers and regions. This shift could alter global economic power dynamics, favoring countries that have embraced decarbonization. CBAM’s influence might also inspire similar measures in other major economies. This could speed up the global move towards a low-carbon economy. However, businesses that don't adapt could face higher costs and lose out to more agile competitors. In conclusion, CBAM presents challenges but also opportunities. Forward-thinking businesses can strengthen their ESG strategies and build more resilient supply chains. Those who assess and adjust their supply chains proactively will be better positioned to thrive in a CBAM-impacted world. Conclusion CBAM is set to have a far-reaching impact on global supply chains, reshaping how companies source, produce, and trade goods. By increasing costs for carbon-intensive imports and encouraging a shift toward greener practices, CBAM is driving a new era of sustainable trade. For businesses, the key to navigating this change lies in enhancing ESG compliance and rethinking supply chain resilience. Those who act now to align with CBAM’s requirements will not only avoid potential pitfalls but also gain a competitive edge in an increasingly carbon-conscious market.
CBAM How CBAM Will Impact Small Businesses: What to Expect The European Union is taking big steps to combat climate change, and one of the most significant moves is the Carbon Border Adjustment Mechanism, or CBAM. If you’re in purchasing or operations at a small business, this term has probably crossed your radar recently. But what does it really mean for you and your company? And, more importantly, how should you prepare? In this article, we’ll break down what CBAM is, explore how it might impact small businesses like yours, and discuss some practical steps you can take to navigate this new landscape. Let's dive in. What is CBAM? A Refresher for Industry Professionals CBAM is the EU’s latest tool to ensure that its ambitious climate goals aren’t undercut by cheaper, carbon-intensive imports. Essentially, it’s a carbon tariff on imports from countries with less stringent environmental regulations. The idea is to level the playing field, so European businesses that adhere to strict emissions standards aren’t unfairly disadvantaged. CBAM will be introduced gradually, with the reporting obligations having already begun in 2023 and to be fully implemented by 2026. For small businesses, this timeline means there’s still some time to prepare—but the clock is ticking. Direct Impacts on Small Businesses: The Immediate Effects As CBAM comes into play, small businesses can expect to feel its impact in several ways, particularly in the areas of cost and supply chain management. Understanding these immediate effects is important for navigating this new regulatory landscape. Cost Implications One of the most direct ways CBAM will affect small businesses is through increased costs. If your business relies on importing materials or products from outside the EU, you might see a rise in costs as those imports are subject to carbon tariffs. This could be especially significant in industries like manufacturing, chemicals, and metals, where carbon-intensive processes are common. For a small business, even a modest increase in costs can be a big deal. Margins are often tighter, and there’s less flexibility to absorb these additional expenses. You might find yourself facing tough decisions about whether to pass these costs on to customers, renegotiate supplier contracts, or even rethink your supply chain altogether. Supply Chain Considerations Speaking of supply chains, CBAM could also introduce new complexities here. Many small businesses operate on just-in-time models, relying on steady and predictable flows of goods from suppliers. CBAM introduces a new variable into this equation—carbon tariffs that could disrupt this balance. You might need to start looking at your supply chain with fresh eyes. Are there opportunities to source materials from within the EU to avoid these tariffs? Could you work with your suppliers to improve their carbon footprints, thereby reducing the potential impact of CBAM? These are the kinds of questions that small businesses will need to deal with sooner rather than later. Indirect Impacts: Beyond the Bottom Line While the direct effects of CBAM are significant, there are also indirect impacts that small businesses need to consider. These can influence everything from market positioning to consumer preferences, shaping the broader competitive landscape. Market Competitiveness Another layer of complexity is the impact CBAM might have on your market position. Larger corporations often have more resources to adapt quickly to new regulations. They might invest in new technologies, switch to more sustainable suppliers, or find other ways to mitigate the impact of CBAM faster than smaller companies can. This doesn’t necessarily mean that small businesses are destined to be left behind. However, it does mean that you’ll need to be strategic. Focusing on sustainability, for instance, can be a powerful way to differentiate your brand and maintain a competitive edge. Customers are increasingly looking for environmentally responsible products and services, and this trend is likely to accelerate as CBAM comes into full force. Shifts in Consumer Preferences On that note, let’s talk about consumers. CBAM isn’t just about regulations and tariffs; it’s also about shifting mindsets. As the EU pushes for greener practices, consumers are becoming more aware to the environmental impact of their purchases. They want to know where products come from, how they’re made, and what their carbon footprints look like. For small businesses, this can be both a challenge and an opportunity. On one hand, meeting these expectations might require changes in how you operate. On the other hand, if you can position your business as a leader in sustainability, you could tap into a growing market of eco-conscious consumers. The key is to be transparent about your efforts and to communicate the steps you’re taking to reduce your carbon footprint. Preparing for CBAM: Practical Steps for Small Businesses With an understanding of both the direct and indirect impacts of CBAM, it’s time to think about how small businesses can prepare. Proactive planning is essential to turn potential challenges into opportunities. Carbon Footprint Reduction So, what can you do to get ahead of the game? First, it’s essential to understand your own carbon footprint. This might seem daunting, but there are tools and resources available to help you assess where your business stands. Once you have a clearer picture, you can start exploring ways to reduce emissions—whether that’s by improving energy efficiency, switching to renewable energy sources, or finding more sustainable materials. Reducing your carbon footprint isn’t just about compliance; it’s also about positioning your business for the future. The more you can do now to lower your emissions, the better prepared you’ll be for CBAM and any other regulations that might come down the line. Supply Chain Engagement Another critical area is your supply chain. Engage with your suppliers early and often. Find out what steps they’re taking to reduce their carbon emissions and explore ways you can work together to ensure compliance with CBAM. This might involve renegotiating contracts, finding new suppliers, or investing in joint sustainability initiatives. Building a resilient and sustainable supply chain is not only smart from a compliance perspective but also a way to future-proof your business. As environmental regulations tighten, companies with strong, sustainable supply chains will be better positioned to thrive. Utilizing Support Mechanisms Finally, don’t forget that you’re not alone in this. The EU and various national governments offer support programs, grants, and resources to help small businesses adapt to new regulations like CBAM. Take advantage of these opportunities to learn, adapt, and grow. Stay informed about the latest developments, seek out expert advice, and connect with industry associations that can provide guidance and support. The more you engage with these resources, the better equipped you’ll be to navigate the challenges and seize the opportunities that CBAM presents. Long-term Considerations: Risks and Opportunities Ahead As we look to the future, it’s clear that CBAM will bring both risks and opportunities for small businesses. Preparing for these long-term impacts is essential for sustaining growth and competitiveness. Potential Risks: As with any significant regulatory shift, there are risks involved. Non-compliance with CBAM could lead to financial penalties, market exclusion, or reputational damage. Small businesses, in particular, need to be mindful of these risks and take proactive steps to mitigate them. Early adaptation is key. The sooner you start preparing for CBAM, the easier it will be to integrate its requirements into your business operations without disruption. Emerging Opportunities: But let’s not forget the flip side: opportunities. CBAM isn’t just a hurdle to overcome; it’s also a catalyst for innovation. By embracing the changes it brings, small businesses can differentiate themselves, access new markets, and build stronger, more sustainable business models. Imagine your business not just surviving under CBAM, but thriving—leading the way in sustainability, winning new customers, and driving long-term growth. That’s the potential that’s within reach if you’re willing to adapt and innovate. Conclusion As CBAM approaches, small businesses face a unique set of challenges and opportunities. While the prospect of increased costs and supply chain disruptions is real, so too is the chance to position your business as a leader in sustainability. By understanding the implications of CBAM, taking proactive steps to reduce your carbon footprint, and leveraging available resources, you can not only navigate this new landscape but also thrive in it. Remember, CBAM is more than just a regulatory hurdle—it’s a sign of the future direction of business in the EU. By embracing this change, you can ensure that your small business is not just compliant, but competitive and resilient in the years to come. Book your personal demo for our CBAM Reporting Manager now and find out how we can help you overcome the challenges and comply with regulations.
CBAM · EU ETS Phase out timeline of free EU-ETS certificates: Implications for EU and non-EU producing companies. The European Union (EU) set out ambitious climate goals like reducing greenhouse gas emissions by at least 55% by 2030 and to achieve climate neutrality by 2050. Central to this effort are the EU Emissions Trading System (EU ETS) and the Carbon Border Adjustment Mechanism (CBAM). Both instruments are designed to reduce carbon emissions while maintaining the competitiveness of EU industries. The phase-out of free EU ETS certificates and the introduction of CBAM certificates represent a significant shift in the EU's approach to carbon pricing, with implications for both EU and non-EU producers. Introduction to CBAM and EU ETS The EU ETS is a cornerstone of the EU’s climate policy, operating as a cap-and-trade system that sets a limit on the total amount of greenhouse gases that can be emitted by covered sectors. Companies receive or purchase emission allowances, which they can trade with one another. Over time, the cap is reduced, driving overall emissions down. The CBAM, on the other hand, is a new mechanism designed to address the risk of carbon leakage—where companies move production to countries with less stringent climate policies or where EU products are replaced by more carbon-intensive imports. CBAM ensures that imported goods into the EU are subject to the same carbon pricing as goods produced within the EU, thereby leveling the playing field and incentivizing global emissions reductions. To ensure this, companies that import CBAM goods into the EU will have to purchase CBAM certificates for the imported embedded emissions starting in 2026. CBAM currently covers seven carbon-intensive sectors. More will follow over time. Free EU ETS Certificates and the Introduction of CBAM Certificates Under the current EU ETS, certain industries receive a portion of their carbon allowances for free. This system of free allocation was introduced to protect energy-intensive industries from carbon leakage, reducing the risk that these industries would relocate production outside the EU to avoid carbon costs. However, as the EU intensifies its climate goals, the free allocation of allowances is increasingly seen as incompatible with the need for a robust and fair carbon pricing system. Therefore, CBAM certificates will replace free EU ETS certificates as the EU shifts towards a more stringent carbon pricing mechanism. By requiring importers to purchase CBAM certificates equivalent to the carbon price that would have been paid had the goods been produced under the EU ETS, the CBAM ensures that non-EU producers are subject to the same carbon costs as EU producers. This move not only reinforces the EU's climate objectives but also encourages global industries to decarbonize, as they face the prospect of increased costs for exporting carbon-intensive goods to the EU. Timeline for the Phase-Out of Free EU ETS Certificates The phase-out of free EU ETS certificates is scheduled to occur gradually, starting with the introduction of CBAM in its definitive phase form 2026 on. From 2026 to 2034, free allowances will be progressively reduced, with a corresponding increase in the number of CBAM certificates required for imports (see picture). This gradual phase-out is designed to give EU industries time to adapt to the new carbon pricing environment while avoiding sudden cost increases that could undermine their competitiveness. During this phase out period, the EU will carefully monitor the impact of the phase-out and the effectiveness of CBAM in preventing carbon leakage. The European Commission has also committed to reviewing the phase-out timeline and the implementation of CBAM, making adjustments as necessary to ensure that both mechanisms effectively support the EU's climate goals. Implications for EU and Non-EU Producers The phase-out of free EU ETS certificates and the introduction of CBAM certificates have significant implications for both EU and non-EU producers. In the first few years of the phase-out, the proportion of free certificates is still high, therefore not so many CBAM certificates need to be purchased. This changes quickly after 2029, increasing the financial impact. This transitional phase is designed to ease the shift for EU industries, allowing them to gradually adapt to the increased carbon pricing. As the phase-out progresses and free allowances diminish, EU producers will see their carbon costs rise. This increase in costs will incentivize them to invest in cleaner technologies and reduce their carbon footprint, aligning with the EU's broader climate goals. The gradual reduction in free allowances ensures that EU producers have time to adjust, but it also means that they must prepare for a future where they compete on equal footing with non-EU producers in terms of carbon costs. For non-EU producers, CBAM represents a new cost for exporting goods to the EU. To remain competitive, these producers will need to reduce the carbon intensity of their production processes or face higher costs associated with CBAM certificates. This creates a strong incentive for global industries to adopt more sustainable practices, contributing to the EU's efforts to drive global emissions reductions. Conclusion The phase-out of free EU ETS certificates and the introduction of CBAM certificates mark a significant evolution in the EU's climate policy. By aligning carbon costs for both EU and non-EU producers, the EU is taking a step towards achieving its climate goals while maintaining the competitiveness of its industries. As this transition unfolds, it will be important for both EU and global producers to adapt to the new carbon pricing landscape, investing in innovation and sustainability to be successful in a low-carbon economy.
ESG · PCF · PEF PEF vs. PCF: Differences in Environmental Impact Measurement The journey to sustainability begins with understanding the environmental impact of our products. However, with various metrics available, it can be challenging to know where to start. In this blog we focus on two important measures: Product Environmental Footprint (PEF) and Product Carbon Footprint (PCF). We explain their differences below and why both metrics are essential for a comprehensive approach to sustainability. In a nutshell - Difference between PEF and PCF? PEF and PCF are both tools used to measure the environmental impact of products, but they differ in scope and focus. PEF provides a comprehensive assessment covering multiple environmental impacts such as water use, land use, and pollution, while PCF specifically focuses on the greenhouse gas emissions associated with a product. These differences make PEF suitable for a holistic environmental strategy and PCF more focused on carbon management and reduction. What is the PEF? The PEF is a method for measuring the environmental impact of a product throughout its entire lifecycle, considering a wide range of environmental factors. PEF covers various environmental impacts, including water use, land use, pollution, and resource depletion. It provides a detailed and thorough understanding of the environmental aspects associated with a product, from raw material extraction to disposal. PEF utilizes the Life Cycle Assessment (LCA) approach, which examines the environmental impacts at every stage of a product's lifecycle. This includes raw material extraction, manufacturing, distribution, use, and end-of-life disposal. The methodology is grounded in international standards such as ISO 14040 and ISO 14044, ensuring consistency and reliability. Additionally, PEF is guided by the European Commission's specific guidelines and frameworks, which further enhance its credibility and adoption across industries. What is the PCF? In contrast, the PCF specifically measures the total amount of greenhouse gas emissions (expressed in CO2 equivalents) generated by a product throughout its lifecycle. PCF focuses solely on carbon emissions, including direct and indirect emissions from production, transportation, use, and disposal. It provides a targeted assessment of a product's impact on climate change. PCF calculations are based on carbon accounting principles and often use the Greenhouse Gas (GHG) Protocol Product Life Cycle Accounting and Reporting Standard. This methodology emphasizes the quantification of carbon emissions at each stage of the product lifecycle, ensuring a clear and focused understanding of its climate impact. PCF is governed by standards such as the GHG Protocol, ISO 14067, and other regional carbon reporting guidelines, providing a robust framework for accurately measuring and reporting carbon emissions. Key Differences Between PEF and PCF The main differences between PEF and PCF lie in their scope and coverage. PEF evaluates multiple environmental impacts, including water use, land use, pollution, and resource depletion, while PCF concentrates exclusively on carbon emissions, providing a focused assessment of climate impact. Methodologically, PEF employs a broader Life Cycle Assessment (LCA) approach, considering a wide range of environmental factors, whereas PCF uses specific carbon accounting methods, emphasizing the quantification of greenhouse gas emissions. In terms of applications, PEF is ideal for comprehensive environmental reporting and sustainability strategies, suitable for businesses seeking a holistic understanding of their environmental impacts and aiming to implement broad sustainability initiatives. On the other hand, PCF is best suited for carbon management and reduction strategies, helping businesses identify and mitigate their carbon footprint, aligning with climate action goals and regulatory requirements. To illustrate the practical application of these metrics, consider industries like food and beverage, electronics, and textiles. In the food and beverage sector, PEF can assess the overall environmental impact of production, packaging, and distribution, while PCF focuses on the carbon emissions from agricultural practices, processing, and transportation. In electronics, PEF evaluates resource use, waste generation, and pollution, whereas PCF highlights the carbon footprint of manufacturing and energy consumption. Conclusion In conclusion, PEF and PCF are essential tools for understanding and managing the environmental impacts of products. PEF provides a broad assessment of multiple environmental factors, while PCF offers a focused analysis of carbon emissions. Together, they offer a robust framework for sustainable business practices. Encouraging businesses to adopt both PEF and PCF metrics will lead to a comprehensive approach to sustainability, enhancing environmental performance, meeting regulatory standards, and responding to consumer demand for sustainable products. As environmental concerns continue to grow, the importance of accurate and comprehensive footprint metrics will only increase. The future of sustainability lies in the integration of holistic and specific impact assessments, guiding businesses toward a more sustainable and responsible future.
EU ETS What Businesses Need to Know About the European Emission Trading System (EU ETS) The European Emission Trading System (EU ETS) is a key element in the EU's effort to combat climate change. For businesses, understanding its workings and implications is essential for compliance and strategic planning. In this blog post, we will dive into the key aspects that businesses need to know about the European Emission Trading System, including its mechanisms, benefits, and challenges. Overview of the European Emission Trading System The European Emission Trading System is the world's first and largest carbon market, based on a cap-and-trade principle. It limits emissions from over 11,000 power stations and industrial plants in 30 countries. Businesses must hold enough allowances to cover their emissions, creating a financial incentive to reduce carbon output. The system sets a cap on emissions, which decreases over time to reduce the overall carbon footprint. Companies receive or buy emission allowances, each representing the right to emit one tonne of CO2. Businesses can buy or sell allowances on the carbon market, providing flexibility in how they comply with emission reduction targets. Additionally, the EU ETS directly influences the Carbon Border Adjustment Mechanism (CBAM) by setting a benchmark for carbon costs. CBAM aims to level the playing field by imposing carbon costs on imports from countries with less stringent climate policies, ensuring that EU businesses remain competitive while preventing carbon leakage. How the Cap-and-Trade System Works The cap-and-trade system sets a limit on the total amount of greenhouse gases that can be emitted by installations covered by the European Emission Trading System. Companies receive or buy emission allowances, which they can trade with one another as needed. This flexibility ensures that emissions are reduced where it is most cost-effective. Businesses receive a certain number of free allowances, with the option to purchase additional ones through auctions. The EU ETS provides a marketplace for buying and selling allowances, ensuring liquidity and price discovery. Additionally, the Market Stability Reserve addresses surplus allowances and ensures market stability, protecting against excessive price fluctuations. Compliance Requirements for Businesses Meeting the European Emission Trading System (EU ETS) requirements is a multi-step process that demands precision and diligence from businesses. Complying with these requirements is not only essential for avoiding penalties but also for ensuring efficient operations and the sustainability of the company. Below is a detailed look at the compliance requirements for businesses participating in the EU ETS. 1. Emissions Monitoring The cornerstone of compliance is accurate emissions monitoring. Businesses must implement reliable systems to accurately measure their greenhouse gas emissions. This involves: Regular Data Collection: Continuously gathering data on fuel consumption, production processes, and other relevant activities that contribute to emissions. Standardized Measurement Techniques: Employing standardized and approved measurement techniques to ensure consistency and accuracy in data collection. Calibration and Maintenance: Regularly calibrating and maintaining monitoring equipment to avoid discrepancies in emission data. 2. Reporting Annually, businesses are required to compile and submit detailed emissions reports. This step is critical for demonstrating compliance and is subject to strict verification processes: Annual Reporting: Companies must prepare comprehensive reports detailing their total emissions for the year. These reports should align with the EU ETS guidelines and include all necessary calculations and data points. Verification by Accredited Bodies: Before submission, the reports must be verified by an accredited third-party verifier. This ensures the accuracy and reliability of the reported emissions data. Documentation and Record-Keeping: Businesses should maintain detailed records of their emissions data, monitoring processes, and verification reports. These records must be kept for a specified period, usually five years, for audit purposes. 3. Surrendering Allowances By April 30th each year, businesses must surrender enough emission allowances to cover their verified emissions from the previous calendar year. This process involves: Allowance Allocation: Businesses receive a certain number of free allowances based on historical emissions and sector benchmarks. However, they may need to purchase additional allowances if their emissions exceed their free allocation. Market Participation: Companies can buy additional allowances from the EU ETS carbon market if necessary. Participating in the market requires understanding market dynamics, pricing, and trading strategies. Timely Submission: It is crucial to surrender the required allowances by the deadline to avoid penalties. Non-compliance can result in high fines and an obligation to make up for the shortfall in the following year. 4. Penalties for Non-Compliance Failure to comply with the EU ETS requirements can lead to significant financial and operational consequences: Fines: Non-compliant businesses face fines of €100 per tonne of CO2 emitted without corresponding allowances. This can quickly escalate depending on the level of non-compliance. Reputation Risk: Persistent non-compliance can damage a company's reputation, affecting stakeholder trust and potentially leading to further regulatory scrutiny. Operational Adjustments: Businesses may need to adjust their operations or invest in new technologies to meet compliance requirements, which can entail additional costs and resource allocation. Ensuring Compliance To ensure compliance with the European Emission Trading System, businesses should adopt a proactive and strategic approach. This includes investing in advanced monitoring technologies, training staff on compliance requirements, and staying informed about regulatory updates. Engaging with environmental consultants and leveraging external expertise can also help navigate the complexities of the EU ETS. Financial Implications and Opportunities The European Emission Trading System affects business costs, as companies must factor in the price of carbon allowances. However, it also offers opportunities; businesses that reduce emissions can sell surplus allowances for profit. Investing in low-carbon technologies can lead to long-term savings and improved sustainability credentials. Trading allowances can provide a cost-effective way to meet emission reduction targets. The need to reduce emissions can drive technological innovation and operational efficiency. Companies that reduce emissions beyond their allowances can sell excess allowances, generating additional revenue. Strategies for Businesses to Thrive in the EU ETS To succeed under the European Emission Trading System, companies should enhance energy efficiency, invest in renewable energy, and explore innovative technologies to reduce emissions. Participating in carbon offset projects and staying updated on policy changes can also provide strategic advantages. The EU ETS is expected to undergo significant changes as the EU tightens its climate goals. Businesses need to stay informed about these developments to adjust their strategies accordingly. Future phases may bring stricter caps and a broader scope, impacting more sectors and creating new challenges and opportunities. By proactively adopting sustainable practices and staying ahead of regulatory changes, businesses can not only comply with the EU ETS but also capitalize on the opportunities it presents. Conclusion The European Emission Trading System presents both challenges and opportunities for businesses. By understanding its mechanisms, complying with its requirements, and adopting proactive strategies, companies can avoid penalties, benefit financially, and enhance their sustainability. Staying informed and adaptable will be key as the European Emission Trading System evolves in the coming years.
CSRD · ESRS Understanding the Difference between CSRD and ESRS The Corporate Sustainability Reporting Directive (CSRD) is being progressively implemented, with more companies coming under its scope each year until 2026. Starting in 2025, large non-listed companies will also be required to report under the CSRD. Integrated within the discussions and requirements of the CSRD are the European Sustainability Reporting Standards (ESRS). Given the complexity and interconnectedness of EU regulations, this blog aims to clarify the differences and commonalities between the CSRD and the ESRS. What is CSRD? The CSRD represents a significant step forward in the EU's efforts to enhance corporate transparency on environmental, social, and governance (ESG) issues. Introduced on January 5, 2023, the CSRD builds upon and replaces the Non-Financial Reporting Directive (NFRD). Its primary objective is to ensure that companies provide comprehensive and reliable information on their sustainability practices, risks, and impacts. The CSRD applies to all large companies and all listed companies within the EU, except micro-enterprises. This broad scope means that a substantial number of organizations, including non-EU companies generating over EUR 150 million in the EU market, must comply. The directive aims to improve the quality and comparability of sustainability information, making it easier for investors and other stakeholders to assess corporate performance against sustainability criteria. What is ESRS? The ESRS are the specific guidelines that operationalize the CSRD's requirements. Developed by the European Financial Reporting Advisory Group (EFRAG) and adopted by the European Commission, the ESRS provide detailed instructions on how companies should report on various ESG topics. The ESRS are designed to be comprehensive, covering a wide range of issues such as climate change, biodiversity, and human rights. They ensure that companies' sustainability reports are consistent, comparable, and aligned with the EU's broader sustainability goals. Importantly, the ESRS also aim to harmonize with international standards, reducing the reporting burden on companies operating globally and preventing unnecessary double reporting. Key Differences Between CSRD and ESRS Understanding the distinction between the CSRD and ESRS is crucial for businesses aiming to achieve effective compliance and reporting. In this blog post, we break down how the CSRD sets the broad legal framework for sustainability reporting and how the ESRS translate these mandates into actionable standards. Learn about the legal obligations, detailed reporting guidelines, and practical methodologies these regulations offer. For a comprehensive comparison, see the detailed table below. Implications for Businesses Navigating the requirements of both the CSRD and the ESRS can seem overwhelming, but understanding their distinct roles simplifies compliance. Compliance Requirements: Businesses need to familiarize themselves with the CSRD to understand the overarching obligations and then dive into the ESRS for specific reporting guidance. This dual approach ensures that companies meet both the legal and practical aspects of sustainability reporting. Operational Impact: Implementing the CSRD and ESRS may require significant changes to existing reporting processes. Companies might need to invest in new systems, hire sustainability experts, or train existing staff to meet the new requirements. Benefits and Challenges: While compliance can be challenging, the benefits include improved transparency, better risk management, and enhanced investor confidence. By adhering to these standards, companies can also position themselves as leaders in sustainability, potentially gaining a competitive edge. Conclusion In summary, the CSRD and ESRS are essential in the EU's drive towards greater corporate transparency and sustainability. While the CSRD sets the broad legal framework, the ESRS provide the detailed standards necessary for effective compliance. Understanding and implementing these requirements will not only ensure compliance but also enhance your company’s reputation and performance in the long term.
CSDDD How to Prepare for the CSDDD: A Step-by-Step Guide The Corporate Sustainability Due Diligence Directive (CSDDD) just entered into force. Therefore, we wanted to provide companies with a Step-by-Step Guide to help them comply with the CSDDD. The directive was signed on June 13, 2024, and was published in the Official Journal of the European Union on July 5, 2024. Today is the first day it is in force and EU member states have until July 26, 2026, to transpose the directive into their national laws. The CSDDD mandates that companies integrate due diligence processes to identify, prevent, and mitigate adverse impacts on human rights and the environment throughout their supply chains. This comprehensive directive covers issues such as child labor, environmental degradation, and corruption. Companies are expected to establish and enforce policies that ensure ethical behavior throughout their supply chains, thus promoting long-term sustainability and high ethical standards. In comparison, the German Supply Chain Due Diligence Act (LkSG) already imposes rigorous due diligence requirements on companies within Germany. However, the introduction of the CSDDD means that the German government will replace the LkSG with the CSDDD, aligning national regulations with the broader EU framework. For companies operating in Germany, this transition will require them to adjust their compliance strategies to meet the specific provisions of the CSDDD. 1. Understanding the CSDDD The CSDDD aims to fundamentally transform how companies approach their impact on human rights and the environment. At its core, the CSDDD requires companies to embed comprehensive due diligence processes into their business operations and supply chains. The directive focuses on identifying, preventing, and mitigating adverse impacts, ensuring that companies take proactive steps to address issues such as human rights abuses, child labor, environmental degradation, and corruption. The CSDDD outlines specific obligations for companies, including conducting thorough risk assessments to identify potential and actual adverse impacts, implementing preventive measures, and establishing grievance mechanisms. Companies are also required to monitor the effectiveness of their due diligence strategies and regularly report on their efforts and outcomes. This transparency and accountability framework not only ensures compliance but also promotes a culture of ethical business practices and long-term sustainability. Moreover, the directive places a strong emphasis on stakeholder engagement, urging companies to consult with affected communities, workers, and other relevant parties. This inclusive approach ensures that the voices of those directly impacted by corporate activities are heard and addressed. By adhering to the CSDDD, companies will align with the EU's commitment to fostering responsible corporate behavior and contribute to the broader goal of sustainable development. After understanding the regulatory context and core requirements, companies can then conduct a baseline assessment, identify risks, and engage stakeholders. Developing a compliance strategy involves setting objectives, allocating resources, and creating an implementation roadmap. The article further details how to implement necessary measures, monitor progress, and ensure continuous improvement to meet CSDDD standards effectively. 2. Initial Preparation Steps Proper preparation is crucial for compliance. These initial steps help companies lay the groundwork for an effective due diligence process. Conducting a Baseline Assessment: Begin by evaluating your current practices. Identify existing policies, procedures, and any gaps related to the CSDDD. For instance, a manufacturing company should audit its sourcing practices to ensure alignment with environmental standards. This assessment will provide a clear picture of where improvements are needed. Risk Identification: Assess potential environmental, social, and governance (ESG) risks within your supply chain. For example, a textile company should check labor practices and environmental impacts at each stage of its supply chain. Understanding these risks allows for the development of targeted mitigation strategies. Stakeholder Mapping: Engage key stakeholders, including suppliers, customers, employees, and regulatory bodies. Early engagement provides valuable insights and fosters collaboration. For example, a food processing company can gain critical feedback on its sourcing practices from stakeholders, enhancing transparency and trust. By following these initial steps, companies can establish a robust foundation for their due diligence processes, ensuring compliance with the CSDDD and promoting sustainable and ethical business practices. 3. Developing a Compliance Strategy With a clear understanding of current practices and risks, the next step is to develop a comprehensive strategy for compliance. Setting Objectives and KPIs: Establish clear goals and key performance indicators (KPIs) for compliance. For example, aim to ensure that 100% of suppliers meet environmental standards within two years. KPIs might include the number of supplier audits conducted and the corrective actions taken. Resource Allocation: Determine the necessary budget, personnel, and resources for compliance. A large corporation might allocate funds for compliance software and extensive training programs, while smaller firms might focus on hiring dedicated sustainability experts to drive their compliance efforts. Implementation Roadmap: Create a detailed timeline for implementing the required measures. This roadmap should include key milestones, responsible parties, and deadlines. For instance, a retail company might set quarterly targets for auditing suppliers and implementing corrective actions, ensuring steady progress towards full compliance. By setting clear objectives, allocating appropriate resources, and establishing a structured implementation plan, companies can effectively navigate the path to compliance with the CSDDD, fostering sustainable and responsible business practices. 4. Implementing Necessary Measures Implementing your strategy involves integrating new processes and ensuring everyone in your organization understands their role. Establishing Due Diligence Processes: Develop and embed due diligence procedures into your operations. For example, a technology company might implement regular audits of its supply chain to ensure compliance with labor and environmental standards. These procedures should be thorough and consistently applied to maintain high standards across the board. Supply Chain Management: Integrate ESG criteria into your supplier selection and management processes. For instance, an electronics manufacturer might require all suppliers to adhere to stringent environmental and labor standards and provide regular compliance reports. This ensures that ESG considerations are embedded throughout the supply chain, promoting overall sustainability. Training and Awareness: Implement extensive training programs for employees and suppliers on CSDDD requirements. A logistics company, for example, could conduct workshops to educate staff and suppliers on identifying and mitigating ESG risks. Ensuring that everyone is informed and engaged is crucial for successful compliance. By establishing robust due diligence processes, incorporating ESG criteria into supply chain management, and promoting training and awareness, companies can effectively integrate their compliance strategies and foster a culture of sustainability and responsibility. 5. Monitoring and Reporting Ongoing monitoring and reporting ensure your company remains compliant and can address issues as they arise. Setting Up Monitoring Systems: Implement continuous monitoring systems to track compliance. For instance, a pharmaceutical company might use compliance management software to monitor supplier practices and ensure adherence to ESG standards. These systems enable real-time oversight and quick responses to any compliance issues. Conducting Internal Audits: Regularly review and audit your compliance processes. Internal audits help identify gaps and areas for improvement. For example, a construction firm might conduct annual audits of its suppliers to ensure they meet labor and environmental standards. This systematic review supports ongoing improvement and adherence to the CSDDD. Reporting Compliance: Prepare and submit compliance reports as required by the CSDDD. These reports should detail the steps taken to comply with the directive, risks identified, and mitigation actions implemented. A financial services firm, for instance, might submit an annual sustainability report outlining its due diligence efforts and compliance status. Clear and thorough reporting demonstrates accountability and transparency. By setting up robust monitoring systems, conducting regular internal audits, and diligently reporting compliance, companies can maintain adherence to the CSDDD and address any issues proactively. 6. Continuous Improvement Compliance with the CSDDD is not a one-time effort but an ongoing process that requires regular updates and enhancements. Establishing robust feedback mechanisms is important for continuous improvement. Companies should actively gather feedback from stakeholders, including suppliers, employees, and customers, to identify areas for improvement. Additionally, it's important to regularly review and update compliance strategies based on new insights and regulatory changes. This proactive approach ensures that the company remains compliant and can adapt to evolving standards, ultimately fostering long-term sustainability and operational efficiency. Conclusion Preparing for the CSDDD involves a comprehensive approach, from understanding the regulatory context to implementing robust due diligence processes and continuous improvement strategies. By following these steps, companies can ensure compliance, mitigate risks, and enhance their sustainability practices. Proactive preparation and adherence to best practices will position businesses for long-term success in the evolving regulatory landscape.
ESG Status and Development of Carbon Pricing Worldwide in 2024 Carbon pricing is becoming an increasingly powerful tool in the fight against climate change. Assigning a cost to greenhouse gas emissions, incentivizes businesses and individuals to reduce their carbon footprint. Additionally, with the introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM), carbon pricing becomes even more relevant for companies. CBAM imposes a carbon price on imports into the EU, leveling the playing field between EU producers subject to the EU Emissions Trading System (ETS) and foreign producers. Notably, carbon prices paid in third countries by the producers will be deducted from the CBAM liability, influencing import costs for CBAM goods. This can also encouraging countries outside of the EU to adopt carbon pricing measures to collect the carbon taxes themself. Overview of Carbon Pricing Carbon pricing can take various forms, the most common being carbon taxes and emissions trading systems (ETS). Carbon Taxes: These directly set a price on carbon by defining a tax rate on greenhouse gas emissions or the carbon content of fossil fuels. For example, Sweden has one of the highest carbon taxes globally, reaching up to USD 137 per ton of CO2. Emissions Trading Systems (ETS): An ETS sets a cap on the total level of greenhouse gas emissions and allows industries with low emissions to sell their extra allowances to larger emitters. The EU ETS is one of the most prominent examples, where prices have exceeded USD 60 per ton of CO2, driving significant emission reductions. Currently, around 24% of global emissions are covered by these carbon pricing mechanisms, marking significant progress over the past decade. Global Trends in Carbon Pricing Over the past ten years, carbon pricing has grown substantially, expanding from covering just 7% of global emissions to nearly a quarter today. This growth reflects the increasing recognition of it as an effective tool for reducing emissions. In the past year, there have been key developments, including the introduction of new carbon pricing instruments in countries like Australia, Hungary, and Mexico, as well as significant reforms in existing systems. High and Low Carbon Prices The price of carbon varies significantly across different regions. The European Union's ETS, Switzerland, and Canada are among the regions with the highest carbon prices. In these areas, the carbon price has reached levels that provide strong incentives for reducing emissions. For instance, the EU ETS has seen prices well above USD 60 per ton of CO2, reflecting stringent policies and high ambition levels. On the other end of the spectrum, some regions have lower carbon prices. These include countries that are still in the early stages of implementing carbon pricing or those with less ambitious targets. For example, Indonesia and Ukraine have relatively lower carbon prices but are planning to increase them in the coming years to align with global targets and the Paris Agreement. Revenue from Carbon Pricing In 2023, global revenue from carbon pricing instruments exceeded USD 100 billion for the first time. This revenue is important for funding climate-related programs, supporting general budgets, and redistributing to households and businesses affected. The majority of this revenue comes from ETSs, primarily due to the large volume of emissions they cover and the relatively high price levels in systems like the EU ETS. Sectoral Coverage and Flexibility Carbon pricing is most commonly applied in the power and industrial sectors, but there is a growing trend of extending these mechanisms to other sectors, such as maritime transport and waste management. Additionally, governments are increasingly using multiple carbon pricing instruments in parallel to expand coverage and increase price levels. For example, some jurisdictions have both an ETS and a carbon tax, targeting different sectors or complementing each other to enhance overall effectiveness. This flexibility allows for more comprehensive and ambitious carbon pricing strategies, tailored to the specific economic and social contexts of different regions. The increasing use of carbon credits to offset liabilities also provides flexibility, enabling entities to meet their obligations in a cost-effective manner while supporting global emission reduction efforts. Challenges and Future Outlook Despite significant progress, there remains a substantial gap between commitments and actual implemented policies. Achieving the Paris Agreement's goals will require stronger political commitment and broader implementation of carbon pricing. This includes expanding coverage to new sectors and increasing carbon prices to levels that drive substantial emission reductions. The future of carbon pricing looks promising, with middle-income countries like Brazil, India, and Türkiye making notable progress towards implementing carbon pricing instruments. Additionally, sector-specific initiatives, such as those for international aviation and shipping, are gaining traction and contributing to the overall expansion of these climate-related financial mechanisms. Conclusion Carbon pricing has made significant progresses over the past decade, but more ambitious and comprehensive policies are needed to meet global climate targets. By understanding the current state and trends of carbon pricing worldwide, stakeholders can better support and advocate for policies that drive effective emission reductions. Staying informed and engaged in these developments is crucial for ensuring a sustainable and livable planet for future generations.
CBAM The 5 Biggest Mistakes in CBAM Reporting and How to Avoid Them The Carbon Border Adjustment Mechanism (CBAM) is a crucial part of the European Union's strategy to fight climate change and limit carbon leakage. Introduced under the European Green Deal, CBAM aims to level the playing field between EU producers and foreign competitors by imposing a carbon price on imports from countries with less stringent environmental regulations. This mechanism addresses the risk of carbon leakage, where businesses might relocate production to countries with laxer emission rules, thus undermining global climate efforts. The timeline for CBAM implementation is structured to allow businesses to adapt gradually. The mechanism entered its transitional phase on October 1, 2023, during which companies must report the embedded emissions of their imported goods without incurring financial liabilities. This period will last until December 31, 2025, after which CBAM will fully come into effect. From January 1, 2026, importers will be required to purchase CBAM certificates corresponding to the total embedded emissions of their imports. A significant shift will occur in July 2024, when companies must switch from using default emissions values to primary data, requiring more precise and accurate reporting. Non-compliance with CBAM regulations can result in severe sanctions. Companies failing to meet reporting obligations or accurately declare emissions could face fines of up to €50 per tonne of CO2e not reported or inaccurately reported, along with additional scrutiny and potential trade restrictions. Therefore, understanding and adhering to CBAM requirements is crucial for businesses engaged in international trade. In this article, we will explore the five most common mistakes in CBAM reporting and provide insights on how to avoid them. By understanding these difficulties and implementing best practices, businesses can ensure compliance, avoid sanctions, and contribute to global efforts to mitigate climate change. 1. Misunderstanding Reporting Scope and Obligations A frequent mistake in CBAM reporting is misinterpreting the scope and specific obligations. Many companies are unaware of the detailed requirements, such as which goods are covered, the exact data needed, and the responsibility for ensuring accurate submissions. This lack of understanding can lead to incomplete or incorrect reports, resulting in non-compliance and potential penalties. How to Avoid It: Conduct Comprehensive Training: Ensure all departments involved in CBAM reporting, including procurement, legal, tax, and sustainability understand their roles and responsibilities. Training sessions should cover the entire scope of CBAM obligations, and the specific data required for compliance. Consult CBAM Guidelines and Experts: Regularly review official CBAM guidelines provided by the EU, such as the official CBAM website, and seek advice from compliance experts. This helps clarify uncertainties and ensures your company is up-to-date with the latest requirements and best practices. 2. Errors in Emissions Calculation Calculating the correct embedded emissions for imported goods is a complex task. Mistakes often occur from using default values or incorrect emissions factors, especially when suppliers do not provide precise data. Moreover, starting from July 2024, companies must switch from using default emissions values to primary data, adding to the complexity of the reporting process. How to Avoid It: Use Accurate Methodologies: Follow the EU’s prescribed methodologies for calculating emissions. Ensure that all emissions data sources are reliable and up-to-date. Cross-check calculations to avoid discrepancies. On the Customs & Tax EU Learning Portal there are a lot of training videos on CBAM. You can find them here. Engage with Suppliers: Develop strong relationships with your suppliers and communicate the specific emissions data requirements for CBAM compliance. Provide them with guidance and tools to help them report accurate emissions data. Verify Emissions Data: Regularly audit the emissions data provided by suppliers to ensure accuracy. Use third-party verification services if necessary to validate the data and avoid potential compliance issues. For example, SupplyOn offers a “Plausibility” check for the emissions data supplier send in their tool. 3. Late Submission of Reports Many businesses fail to submit their CBAM reports on time, often due to poor planning or lack of awareness of reporting deadlines. In the transitional period CBAM reports must be submitted quarterly, no later than one month after the end of each quarter. After the transitional period the report must be submitted yearly. How to Avoid It: Set Internal Deadlines: Establish internal timelines for report preparation well in advance of the official deadlines. For example, if the CBAM report is due by January 31st, set an internal deadline for January 15th to ensure everything is in order. Maintain an Updated Calendar: Keep an updated calendar of all CBAM reporting deadlines and conduct periodic reviews to ensure readiness. Assign specific team members to monitor and manage these deadlines. Understand Late Submission Procedures: If a technical error prevents you from submitting on time, you can request a delayed submission via the CBAM Transitional Registry. After the request, you will have 30 days to submit your report. Additionally, the first two CBAM reports (due by January 31 and April 30) can be corrected until July 31, 2024. Here is an overview with the submission deadlines and possible modifications: A guide on how to request delayed submission can be found here. 4. Neglecting Indirect Emissions Focusing solely on direct emissions and overlooking indirect emissions from electricity or other inputs is a common oversight. This can result in incomplete reporting and non-compliance with CBAM regulations. How to Avoid It: Comprehensive Data Tracking: Ensure your data collection encompasses both direct and indirect emissions, including emissions from electricity consumed during the production process and other indirect sources. Apply Correct Emission Factors: Use the appropriate emission factors for indirect emissions as outlined in CBAM regulations. Verify these factors regularly to ensure they are up-to-date and accurate. Train Your Suppliers: Educate your suppliers on the importance of providing accurate data on both direct and indirect emissions. Provide them with guidelines and tools to help them comply with CBAM requirements. Engage Cross-Functional Teams: Involve various departments such as procurement, sustainability, and logistics in the emissions tracking process. This collaborative approach ensures that all relevant emissions data is captured and reported accurately. 5. Lack of Integration and Automation Relying on manual processes for data collection and integration instead of using automated systems increases workload, error rates, and inefficiencies in data management. Manual methods are not only time-consuming but also prone to inaccuracies, leading to inefficient reporting processes and potential compliance failures. How to Avoid It: Adopt Automated Systems: Implement automated systems for data capture and integration to reduce errors and improve efficiency. Automation streamlines the reporting process, minimizes manual work, and ensures accurate data capture. Integrate Data Management: Use integrated data management solutions that can seamlessly collect, store, and report CBAM-relevant data. This helps in maintaining consistent and accurate records. Regular System Audits: Conduct regular audits of your automated systems to ensure they are functioning correctly and capturing all necessary data accurately. By incorporating automated systems and ensuring seamless data integration, businesses can significantly reduce the risk of errors, improve efficiency, and facilitate easier compliance with CBAM requirements. SupplyOn's CBAM Reporting Manager is one such automated system that helps companies deal with complex CBAM requirements and addresses all five of the most common mistakes. Get in touch with us to get a first look at our software.
CBAM CBAM Reporting: How to prepare with primary data requirements from July The Carbon Border Adjustment Mechanism (CBAM) is a key element of the European Union's climate strategy. Its goal is to stop carbon leakage and make sure EU industries stay competitive. CBAM, which is based on Regulation (EU) 2023/956, levies a carbon price on imported goods that corresponds to the price applicable in the EU under the Emissions Trading Scheme (ETS) to ensure a “level playing field” for goods produced inside and outside the EU. To comply with regulations and assess financial impact, companies need accurate carbon reporting. It's essential for businesses to understand the difference between using default values and primary data for this reporting. Urgency to Collect Accurate Primary Data As the sole use of default values is only permitted until June 30, 2024, it is crucial for companies to start collecting accurate primary data now to ensure compliance for the July-September reporting period. The transition to primary data reporting is not only a regulatory requirement but also a strategic necessity to maintain competitive advantage and avoid potential financial and operational setbacks. Consequences of Failing to Collect Accurate Data: Regulatory Penalties: Non-compliance with CBAM reporting requirements can result in substantial fines and penalties. Reporting declarants may face penalties ranging between €10 and €50 per ton of unreported incorrect emissions. Higher penalties can be applied when more than two incomplete or incorrect reports have been submitted or the duration of the failure to report exceeds 6 months. Increased Costs: Inaccurate reporting due to reliance on default values can lead to overestimation of emissions. An overestimation in the full implementation period will require the purchase of more CBAM certificates than necessary, significantly increasing compliance costs. Reputational Damage: Failing to comply with CBAM regulations can harm a company’s reputation, affecting stakeholder trust and market positioning. Operational Disruptions: Last-minute efforts to gather primary data can cause significant operational disruptions, diverting resources from core business activities. Understanding CBAM Reporting CBAM aims to make sure EU-produced goods and imports are on an even playing field by equalizing carbon costs. This prevents companies from moving their production to countries with less stringent emissions regulations. Initially, CBAM targets the emission-intensive sectors iron and steel, cement, fertilizers, aluminum, hydrogen and electricity. The rollout started with a transitional period from October 2023 to the end of 2025 and then shifts to a definitive phase in January 2026. Accurate carbon reporting is crucial for both compliance and efficiency under CBAM. It impacts the purchasing of CBAM certificates, which in turn affects a company's financial liability and competitive position. Precise reporting helps avoid penalties and strengthens a company's sustainability credentials. Differences Between Default Values and Primary Data in CBAM Reporting Challenges with EU's Communication Template Many companies initially attempt to use the EU's communication template to collect primary data for CBAM reporting. While this template is intended to standardize data collection, it often leads to significant challenges and failures: Complex to Understand and Difficult to Use: The EU's template can be complex and not user-friendly, making it difficult for users to navigate and input data correctly. Lack of Indication of Data Plausibility: There is no plausibility check for the supplier-provided data and whether the emissions values are too high or too low, which can lead to inaccurate reporting. Unstructured Data Collection: The template does not facilitate structured data collection from all relevant installation sites, leading to fragmented and inconsistent data. Limited Bulk Operations: The template is not designed to send to multiple suppliers at once, nor does it easily allow for tracking of responses or sending reminders for corrections, which complicates the data collection process. Time-Consuming Manual Data Entry: The template requires extensive manual data entry, which can be time-consuming and prone to errors, increasing the risk of inaccurate data submission. SupplyOn's CBAM Reporting Manager SupplyOn's CBAM Reporting Manager is designed to overcome these challenges and simplify the standardized data collection process to support your journey to CBAM compliance, ensuring companies can efficiently transition from default values to primary data reporting with minimal effort. Key Features that You need for October Reporting: - Automated Data Collection: CBAM Reporting Manager automates the collection of emissions data across various stages of the supply chain including operators and installation sites, reducing manual efforts and ensuring data accuracy. - Collection of Mandatory Data Possibility: The software offers the option to collect and report only mandatory CBAM data to reduce the effort on both sides, importers and their suppliers. - Bulk Data Collection: With just few clicks you can now collect data from all relevant operators and their installation sites at once. - Plausibility Indicator: The software has plausibility database integrated to immediately check the collected supplier CBAM data where they are too high or too low. - One click CBAM Report: The reporting panel makes it incredibly easy to check and create quarterly “XML” CBAM report just with a single click which are ready to submit to EU Transitional Registry. What you should consider for July-September Reporting Period: Transitioning from default values to primary data for CBAM reporting presents significant challenges for companies, but it is necessary for accurate compliance and financial efficiency in long term. SupplyOn’s CBAM Reporting Manager provides a robust solution, simplifying the data collection process and supporting your reporting journey with minimal effort.
