Leveraging Primary Data for CBAM Reporting: Q&A from Our Webinar

The Carbon Border Adjustment Mechanism (CBAM) is a vital tool in the EU’s fight against climate change, designed to prevent carbon leakage and incentivize global sustainability practices. In our recent webinar, “Leveraging Primary Data for CBAM Reporting in October 2024,” we had a fantastic engagement, with participants asking insightful questions about the CBAM framework, challenges, and best practices.

To help businesses better understand how to navigate CBAM compliance, we’ve compiled the key questions and answers from the webinar below. If you missed the webinar, this Q&A will provide a useful recap.

Primary data plays a crucial role in CBAM reporting because it allows companies to provide accurate and verifiable emissions information. This ensures compliance with CBAM regulations and supports transparency in carbon footprint measurement across supply chains. Companies that rely on primary data can present a more precise picture of their emissions, reducing the risk of penalties or misreporting.

Gathering primary data requires direct engagement with suppliers and internal operations to track real-time emissions across production processes. Solutions like carbmee EIS™ can help by automating data collection and providing verified and standardised emissions data, ensuring companies have accurate and compliant reports.

The most common challenges include:

• Data availability: Many suppliers may not have sophisticated systems for tracking emissions.
• Data standardization: Different suppliers may report data in various formats, making it difficult to consolidate.
• Data verification: Ensuring that the data collected is accurate and reflects the true emissions footprint of the supply chain.

By utilizing tools such as carbmee EIS™, companies can streamline data collection, verification, and standardization to overcome these challenges.

While primary data offers the most accurate representation of emissions, secondary data, such as industry averages or estimates, is often used when primary data is unavailable. However, secondary data can lead to inaccuracies and potentially higher carbon tariffs under CBAM. Whenever possible, businesses should prioritize primary data collection.

Yes, automation plays a significant role in simplifying CBAM compliance. Businesses can use software solutions that automate the collection, validation, and reporting of emissions data. This reduces manual work, ensures accuracy, and accelerates compliance. A platform like carbmee EIS™ can automate many of these processes, allowing companies to focus on their core business while staying compliant with CBAM regulations.

The CBAM regulation is being phased in, with full compliance expected by 2026. However, businesses need to start preparing now by setting up data collection mechanisms and ensuring that they can meet reporting requirements by the start of the transitional phase in 2025. Leveraging automated data collection solutions early on will help businesses ensure smooth compliance when the deadlines hit.

Small and medium-sized enterprises (SMEs) often face resource constraints when it comes to CBAM compliance. However, they can mitigate this by:

• Leveraging automated tools to gather and report data efficiently.
• Collaborating with industry associations that offer guidance on CBAM requirements.
• Engaging with suppliers to ensure accurate and consistent data across their supply chains.

For SMEs, automated tools such as carbmee EIS™ can be particularly beneficial in streamlining the CBAM reporting process and reducing the need for large, resource-intensive compliance teams.

Non-compliance with CBAM can result in penalties, increased tariffs, or exclusion from certain markets. In the long term, failure to comply may damage a company’s reputation, especially as consumers and investors increasingly prioritize sustainability. It is critical for companies to ensure their data collection processes are reliable and that they meet all CBAM reporting requirements to avoid such risks.

CBAM ensures that companies importing goods into the EU are subject to the same carbon costs as those within the region. This levels the playing field and encourages global players to adopt more sustainable practices. Businesses trading with non-EU countries may need to adjust their supply chains or pricing models to remain competitive.

Yes, the EU provides various resources and guidelines to help businesses navigate CBAM compliance. In addition, platforms like carbmee EIS™ offer tailored solutions that streamline the data collection and reporting processes, ensuring businesses of all sizes can transition to CBAM compliance efficiently.

The Carbon Border Adjustment Mechanism represents a significant shift in global trade dynamics, emphasizing the need for accurate emissions reporting and the use of primary data. As demonstrated in our recent webinar, businesses are eager to learn how to leverage technology and best practices to meet CBAM requirements. carbmee EIS™ provides a robust solution to streamline this process, ensuring full compliance with minimal effort.

For more insights on how you can optimize your CBAM compliance process, stay tuned to our blog or contact us at carbmee for tailored solutions.

If you missed the webinar and want more in-depth knowledge about CBAM reporting, watch the full recording here or contact our team for personalized advice on your CBAM journey. Learn more about how carbmee EIS™ can help your business achieve complete CBAM compliance here.