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The Carbon Border Adjustment Mechanism (CBAM) report is a key component for the regulation to work. For many businesses, this report represents a burdensome task. Collecting accurate data on embedded emissions from non-EU suppliers is time-consuming and often complicated by inconsistent methodologies and communication channels. Suppliers who are unfamiliar with CBAM requirements may face difficulties in providing the necessary data. Thereby increasing the administrative burden on importers. Additionally, aligning these datasets with EU standards, calculating emissions precisely, and submitting compliant reports to the CBAM registry can overwhelm companies, particularly those still relying on manual processes. In this article, we explore the two methods for creating a CBAM report and explain the advantages and disadvantages.
Manual vs. Automated reporting
CBAM reporting is required quarterly during the transitional phase, which extends until the end of 2025. From 2026 onward, an annual CBAM declaration must be submitted. The EU provides two approaches for creating a CBAM report: manual reporting and XML-based reporting.
Manual reporting involves businesses gathering emissions data from each supplier and entering it directly into the CBAM registry. Within the registry, CBAM declarants must create a blank report and manually input every good. For each item, the declarant must specify the operator, installation, and emissions data. This process is highly labor-intensive and prone to human error, particularly for companies managing numerous suppliers or importing high volumes of goods. Moreover, manual reporting lacks scalability, making it less viable as CBAM requirements expand.
Xml reporting allows companies to compile all required data into an xml file, which is then uploaded to the CBAM registry in a ZIP format. Once uploaded, the registry automatically populates the CBAM report based on the provided xml data. Additional goods and emissions can be added manually if any information is missing from the initial file. This method is particularly advantageous for large importers, enabling them to efficiently manage high data volumes. However, it is not without its challenges. Xml reports must be flawless—any missing or incorrect data will result in error messages, preventing submission. Companies must therefore have a clear understanding of the required data and the correct format for the xml file. Without this knowledge, the process can become daunting.
Creating a one-click CBAM report
A one-click CBAM report simplifies the reporting process by automating xml creation, significantly reducing the risk of errors and saving valuable time. Here’s how it can work:
Centralized data collection: Emissions data from suppliers is integrated into a unified platform. Suppliers can upload their data directly, eliminating the inefficiency of fragmented communication via email or other tools. Alternatively, the collected data can be consolidated into a single Excel file, which serves as the basis for generating the report.
Automating xml creation: Next, a script is developed to handle all reporting requirements, taking the centralized data and converting it into an xml file formatted according to CBAM standards. This script ensures compliance with EU validation rules to prevent errors during submission.
Xml file generation: Once all data is available the script generates a CBAM-compliant xml file that can be directly submitted to the EU registry. If the script is configured correctly, the report will automatically populate in the registry. In the event of errors, adjustments can be made to the script or the xml file itselfe to resolve issues.
This streamlined approach minimizes errors, reduces administrative workload, and ensures a seamless reporting experience.
Choosing the right software solution for a one-click CBAM report
Creating a one-click CBAM report requires robust software that centralizes and filters all necessary data. The right tool will allow you to generate reports directly within the platform. One such solution is SupplyOn’s CBAM Reporting Manager, designed to simplify the CBAM reporting process. This tool enables users to request and collect all required data in one place, providing real-time status updates and comprehensive documentation. If a supplier fails to respond, this documentation can be used for the report. When the reporting period begins, users can select all relevant requests and generate a one-click xml report, which can then be uploaded directly to the EU registry.
Conclusion
The EU offers two methods for submitting CBAM reports: manual input and xml-based reporting. The choice between these methods largely depends on the volume of goods and suppliers a company manages. For businesses with limited imports, manual reporting may be the quickest and simplest solution. However, for companies dealing with large import volumes, manual processes can quickly become unmanageable. In such cases, xml-based reporting, especially when supported by a robust software solution, offers a more efficient and scalable alternative. By investing in a one-click reporting system, businesses can streamline compliance, minimize errors, and save significant time and resources.
