CBAM Explained: What EU Exporters and Suppliers Must Know

What Is CBAM?

The EU Carbon Border Adjustment Mechanism (CBAM) is an EU regulation that puts a carbon price on imports of certain carbon-intensive goods into the European Union. It came into force in October 2023, with a transitional reporting period running until end of 2025, and full financial implementation from January 2026.

CBAM is designed to prevent "carbon leakage" — the risk that EU companies outsource carbon-intensive production to countries with no carbon price, undermining the EU Emissions Trading System (ETS).

Which Products Are Currently Covered?

CBAM currently applies to six sectors:

The European Commission has indicated that CBAM may expand to additional sectors after 2026, including chemicals, polymers, and organic chemicals.

Who Actually Has to Report?

EU importers are legally responsible for CBAM declarations. They must report the embedded carbon in goods they import from non-EU countries.

Non-EU exporters (your suppliers outside the EU, or you if you export to the EU from outside) need to provide verified embedded carbon data so the EU importer can complete their declaration accurately.

If you are an EU-based manufacturer using CBAM-covered raw materials from non-EU suppliers, your supplier's CBAM carbon data affects your own Scope 3 Category 1 calculations.

What Data Is Required Under CBAM?

For CBAM purposes, "embedded emissions" means:

• Direct emissions during manufacturing (Scope 1 equivalent) — the combustion of fuels in the production process
• Indirect emissions from electricity consumed in production (Scope 2 equivalent) in some cases
• Production volume — to calculate emissions per tonne of product

The CBAM declaration requires emissions in tCO2e per tonne of product (an intensity metric, not a company-level total).

How CBAM Relates to Your CSRD Supplier Questionnaires

CBAM and CSRD are separate regimes but they overlap in practice:

• If your enterprise clients manufacture CBAM-covered goods, their Scope 3 Category 1 calculations for CSRD purposes may use your CBAM-reported embedded emissions data
• If you receive raw materials from non-EU suppliers, their CBAM embedded carbon data feeds your own Scope 1/2 calculations
• The GHG Protocol methodology used for CSRD is compatible with (though not identical to) CBAM embedded emissions calculations

What EU SME Suppliers Should Do Now

If you supply CBAM-covered materials to EU importers: - Calculate your production-level Scope 1 and Scope 2 emissions (already required for CSRD questionnaires) - Divide your total tCO2e by your production volume to get a per-tonne embedded emissions figure - Provide this figure to EU importer clients when requested for their CBAM declarations

If you are an EU manufacturer purchasing CBAM-covered inputs: - Request embedded carbon data from your non-EU suppliers - Use this data in your Scope 3 Category 1 calculations for CSRD

For standard EU SME suppliers not directly trading CBAM goods: - CBAM does not create a direct reporting obligation for you - Your priority remains responding to CSRD-driven SMETA and procurement questionnaires

Generating Carbon Data That Satisfies Both CBAM and CSRD

A Carbon Passport from DeCarbonOPS covers your company-level Scope 1 and 2 emissions — the same underlying data that CBAM embedded emissions calculations are based on. While a company-level Carbon Passport is not identical to a product-level CBAM declaration, it provides the verified operational data foundation that both regimes require.