Implemented in the EU in October 2023, the Carbon Border Adjustment Mechanism (CBAM) serves as an equalizing measure, addressing the challenges faced by domestic producers adhering to stringent emissions restrictions and the Emissions Trading System (ETS). This initiative aims to level the playing field by imposing similar requirements on importers dealing with products in high emissions categories. Simultaneously, it encourages other jurisdictions to adopt analogous carbon pricing schemes.

The CBAM’s phased implementation introduces distinct reporting, verification, and carbon certificate purchase requirements. Additionally, specific guidelines outline the calculation of embedded emissions for products, deviating from established standards for product carbon footprint. Our white paper delineates separate guidelines tailored for producers in non-EU countries and importers within the EU, offering a comprehensive overview of the steps goods producers must take to report embedded emissions to importers.