The Carbon Compliance Checklist

The Carbon Border Adjustment Mechanism (CBAM) is the EU’s landmark policy to prevent carbon leakage and promote global decarbonisation. As the EU tightens its climate goals under the European Green Deal, CBAM aims to ensure that imported goods are subject to the same carbon costs as those produced within the EU. If a business is importing cement goods into the EU, they are now subject to CBAM reporting requirements. Certain sectors such as iron/steel, aluminium, cement, fertilisers, hydrogen, and electricity have been chosen based on their emission-intensive production processes. The transitional phase of CBAM began in October 2023, requiring importers to submit quarterly reports on the embedded emissions of covered goods. By 2026, full compliance will be enforced, including the purchasing of CBAM certificates based on verified emissions. The cost of certificates will be gradually phased in until reaching 100% market price in 2034.

Cement goods subject to CBAM include calcined clay, cement clinker, white portland cement (whether or not artificially coloured), other portland cement, hydraulic cement, and aluminous cement. Other materials, such as granulated blast furnace slag, fly ash, and natural pozzolana, that are used in the manufacture of other hydraulic cement goods, (including blended or ‘composite’ cements) are not currently in scope. The cement sector is required to account for both direct and indirect embedded emissions.

As companies gear up for this new regulatory landscape, accurate and high-quality carbon data is essential. This article provides a clear guide on how organisations can collect high quality data for CBAM compliance.

Step 1: Understanding CBAM obligations

Before diving into data preparation, it is important to determine whether the company is subject to CBAM, whether it acts as an importer (typically the customer or entity within the EU), and, if so, which imported goods fall under the scope of CBAM. During the transitional phase, importers must submit CBAM reports every quarter via the EU's CBAM Transitional Registry. Producers of CBAM-regulated goods have a responsibility to provide transparent data to the importers. Each report must include:

• Total embedded emissions (both direct and indirect) per ton of imported product.
• Production site details of non-EU suppliers.
• Methodologies used to calculate emissions.
• Verification status (verification is required from 2026).

Knowing exactly what to report and by when helps companies prioritise data collection and supplier engagement.

Step 2: Map the supply chain

CBAM focuses not only on the final imported goods, but on how and where they were produced. The process begins with mapping the supply chain for all products within the CBAM scope. This includes:

• Identifying non-EU suppliers and production facilities.
• Understanding the production processes involved (especially energy-intensive steps).
• Collecting supplier contact information and establishing communication channels.
• This mapping exercise serves as the foundation for gathering reliable primary data from suppliers, which is preferred over using default values.

Step 3: Collect primary emissions data

Primary data is key for CBAM compliance. The goal is to collect actual emissions data from suppliers, including:

• Direct emissions from production (e.g. combustion of fossil fuels on-site).
• Indirect emissions from electricity consumption (based on the regional or national grid mix).
• Embedded electricity used in the manufacturing of the good and its raw materials.

Data collection from suppliers represents one of the biggest challenges and probably the most time-consuming task for CBAM declaration. Creating a strong communication channel, or implementing contractual obligations with suppliers is essential to reduce uncertainties and avoid last minute hassles. When requesting data, ensure suppliers are aware of the EU-approved calculation methods, such as those in the EU's CBAM Implementing Regulation. Suppliers should be encouraged to maintain documentation and logs to support future audits.

Step 4: Apply the correct methodology

CBAM requires that emissions be calculated using specific methodologies. These should:

• Align with EU guidance (e.g. EU ETS Monitoring and Reporting Regulation).
• Include all relevant emission sources and account for embedded emission content in raw materials where applicable.
• Distinguish between direct and indirect emissions clearly.
• The use of official CBAM communication templates and tools is recommended where possible. These are designed to help importers ensure consistency and comparability across submissions.

Some businesses may choose to use life cycle assessment (LCA) or carbon accounting data to accurately report their emissions and identify potential reduction opportunities when possible. However, CBAM reporting only includes emissions from the manufacturing stage, unlike LCA data, which also covers transport and other auxiliary emissions.

Step 5: Prepare for verification (even during the transitional phase)

Although third-party verification is not mandatory during the transitional phase (2023 – 2025), preparing data as if it were being audited is a smart move. To do this:

• Keep source documents from suppliers (e.g. meter readings, fuel receipts).
• Record calculation steps and assumptions clearly.
• Organise your data in a format that can be easily reviewed and checked.

From 2026 onwards, emissions data must be verified by an accredited verifier. Starting early helps build confidence in processes and avoids future penalties.

Step 6: Create an internal CBAM reporting system

Consistency and accuracy in reporting will require internal systems that support:

• Quarterly data collection and aggregation.
• Data validation workflows.
• Version control and audit trails.

If the company already reports emissions under frameworks like Carbon Disclosure Project (CDP), Greenhouse Gas (GHG) Protocol, or European Union Emissions Trading System (EU ETS), it may be possible to adapt these systems. However, CBAM’s focus on product-level emissions and import volumes means new processes and coordination with procurement teams will be needed.

Looking ahead

CBAM marks a fundamental shift in how international trade interacts with climate policy. While the compliance requirements may seem complex, they also present an opportunity for businesses to gain better visibility into their supply chains and take a proactive role in carbon emissions reduction strategies. By implementing sustainable practices along their supply chain, businesses can become more resilient to carbon border taxes.

By starting early, building strong data quality practices, and fostering transparent supplier relationships, organisations can not only meet CBAM audit requirements but also position themselves as a leader in sustainable trade. CBAM represents an innovative opportunity to work towards decarbonisation. Through a joint effort between businesses and their international suppliers, it is possible to make a significant positive impact on climate change mitigation. At Tunley Environmental, assistance is provided to organisations to prepare and verify that their carbon data meets CBAM compliance requirements. Support is also offered to understand supply chains and identify opportunities for carbon emission reductions. PhD-level advice is tailored to each organisation, simplifying the processes of data collection and verification of data quality.

Read the article online at: https://www.worldcement.com/special-reports/05012026/the-carbon-compliance-checklist/